Co-op and condo prices up in Manhattan, but there's some relief for first-time buyers
This week, the city's real estate brokerage firms released their Manhattan sales reports for the first quarter of 2017, and while the numbers tend to vary based on who's collecting the data, it looks like transactions have picked up after the November presidential election. That's not because of who's at the White House, per se, but because people tend to hold off on buying during presidential campaigns. "We saw the same thing happen around the election in 2012," explains Jonathan Miller, author of the Douglas Elliman market report. "It's something of an election phenomenon where people pull back before the election and then there's a release of pent-up demand afterward."
"All of our agents are seeing this post-election boom," affirms Diane M. Ramirez, chairman and CEO of Halstead Property. "Buyers that were holding off are moving into the market. Sellers are coming to more reasonable price levels, too."
Now to the numbers: According to Douglas Elliman, the median sales price in Manhattan declined year-over-year by 3.3 percent to $1.1 million, while the price-per-square-foot rose 3.8 percent to $1,778 (a record); the average sales price went up 2.6 percent to $2,104,350 (also a record), and the number of transactions was basically unchanged, up 0.5 percent to 2,892.
Listing inventory jumped 6.6 percent, while the listing discount rose 2.1 percent to 4.2 percent.
Halstead’s numbers are similar: "The average apartment price in Manhattan reached a record in the first quarter ... .at $2,174,105," the report found. The firm's report pegged the median price at $1.150 million was slightly above an old record the market hit back in the first quarter of 2016.
Ramirez says she's feeling "optimistic" about the market's future. She says she looks closely at consumer confidence numbers, which are at their highest in 16 years. "People’s confidence to move forward was lacking. The fact that it was such a quick change after the election was a pleasant surprise," she adds.
Things are slower than at the middle and bottom of the market, Ramirez confirms. "There’s more supply at the top than we’ve ever had," she says. "The deals may be happening, but it takes a while to assimilate. That's something we expected."
Miller says one figure jumps out at him: "The biggest thing for me, is that across all sectors—co-ops, condos, resale, new development, luxury and non-luxury—the listing discount expanded." The listing discount is the difference between the asking price and the price the apartment sells for. "What we’re seeing is pragmatism entering the market, and a move away from 'aspirational' pricing. Sellers are traveling further to meet buyers at a price they feel comfortable with," he says. "That’s important because that’s how transactions happen, and transactions are the proper measure of the health of a market, more so than price."
The market is just busier, says Miller. "People are making offers and getting out there. There’s just more happening. But the real question is whether that continues," he says. "I would characterize the overall market as moving sideways, not climbing."
Considering that it's First Time Buyers Week here on Brick, we asked Miller what he thought the current market means for that segment of the population. He points to the fact that bidding wars and over-ask sales are happening at 12.6 percent of sales. "That’s a far cry from 31 percent, in mid-2015."
That means as a buyer in Manhattan, you still may be able to get a deal—relatively. "We've seen a steady increase in inventory," says Miller, "although we're still halfway between record highs and record lows. Inventory is not too hot, but it's not too cold either. There is relief in the sense that the market is not as intense as it was in recent years."
But, he says, the lower to middle end of the market—for us mere middle to upper middle class mortals—"is still much tighter relative to the high end of the market."
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