Jonathan Miller, president and CEO of Miller Samuel Inc.
NEW YORK CITY—The Manhattan residential sales market continued to weaken at year's end 2018 with sales down more than 3% and the median sale price nearly 6% lower than the fourth quarter of 2017.
The median sale price for Manhattan stood at $999,000 at the end of the fourth quarter of 2018, down 5.8% from the $1,060,000 median at the end of 2017 and 10.6% lower than the $1,117,000 third quarter 2018 median sale price, according to a report released today by real estate brokerage firm Douglas Elliman. The price per-square-foot for a sold residential unit in Manhattan rose 4.7% to $1,684 year-over-year.
The number of residential sales in the fourth quarter of 2018 totaled 2,432 closings, off by 3.3% from the year ago's total of 2,514 and significantly less (18.6%) as compared to the third quarter of 2018's total of 2,987. The fourth quarter sales decrease marked the fifth consecutive quarter where sales declined year-over-year, although the brokerage firm noted that the rate of sales decline has been steadily easing.
The brokerage firm pointed to three key factors that have and will likely continue to cause the market downtown. “Higher mortgage rates, uncertainty about the impact of the new federal tax law and challenged affordability continued (and) will likely continue to play a role suppressing sales levels in 2019,” Douglas Elliman states in the report.
The median sale price for a resale unit in Manhattan rose 2.8% in the fourth quarter of 2018 to $942,500—the seventh consecutive quarter that the median resale price increased from the previous year.
“Median sales prices dropped below the $1-million threshold for the first time in three years and the number of co-op sales outperformed condos,” says Steven James, CEO of New York City, Douglas Elliman. “Bidding wars were at their lowest share in six years, creating an excellent opportunity for buyers.”
Douglas Elliman reports that co-ops performed better than condos in Manhattan. The majority of inventory gains were seen in the studio and one-bedroom markets, and luxury prices were skewed higher by larger-sized sales.
The fourth quarter median price for a luxury residential unit in Manhattan rose 10.3% from a year earlier to $6,316,016 based on sales (244) that fell 3.2% from a year ago and 18.4% from the third quarter of 2018.
Another key market metric was that new development closings represented 10.9% of all sales in the fourth quarter, down from a 15.4% market share at the end of the fourth quarter of 2017.
“All-in-all, this was a weaker market than a year ago, but there was nothing dramatic to change from prior quarters in 2018,” notes Jonathan Miller of Miller Samuel Inc., the author of the Douglas Elliman Manhattan sales market report. “It looks like 2019 market sales and prices might show us 'more of the same' as the federal tax law and higher rates play a crucial role in the housing marketplace.”
The listing inventory rose year-over-year by 11.8% to 6,092, but Douglas Elliman states that all of the gains in inventory occurred in the re-sale market. The supply of new development units fell 10.6% as developers pulled apartments out of active inventory.
Other key data points from the report include:
• The total market share of all cash transactions rose 4.2% to 55.4% from a year ago, which resulted in the highest market share in the five years Douglas Elliman has tracked this market metric.
• The fourth quarter of 2018 saw the lowest market share of bidding wars in six years.
• Most inventory gains continued to occur in the studio and 1-bedroom markets
• The average days on market slipped 4.1% to 93 days
• The listing discount was 6.2%, up from 5.4% from the previous year, which was the highest quarterly average in six years.
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John Jordan
John Jordan is a veteran journalist with 36 years of print and digital media experience.
