Manhattan Sales Plunge: A Buyer's Paradise?
Is it the perfect time to buy in Manhattan Real Estate? Bidding wars seem to be slowing down with inventory rising, according to Douglas Elliman’s third quarter report, which may the perfect landscape for those seeking city digs—but on what end of the market?
The market’s sales drop was the lowest since 2011, a year of static recovery from the Great Recession. The number of sales in the borough dipped nearly 19 percent lower than the previous year.
The average sales prices surged during the slowdown—the slowdown being predominantly in the high-end of the market. The top 10 percent of sales prices grew almost 21 percent compared to the third quarter of 2015 to a staggering $8.8 million, while condominiums or co-ops sprang up 17 percent to $2.03 million.
“This is healthy for the market as it forces a pause from the unsustainable price pace growth we have been experiencing in Manhattan over the last several years,” said Robert Dankner, President of Prime Manhattan Residential to Forbes. “It allows for an orderly absorption of the inventory on the upper end of the price range.”
Though prices have been on the upswing, there’s room for stability since the blustery competition that saw buyers paying 30 percent above the asking price the prior year plunged to 17 percent. The ensuing lack of urgency from luxury buyers has enabled units to remain on the market longer—good news for buyers.
Contrarily to the oversupplied, high-end market’s loss in demand, the lower end suffered from a shortage of supply, as related to increasing demands. Still, Manhattan prides itself with one of the world’s most dynamic and high-priced real estate markets, braced by a continual influx of new luxury developments.
The 13-or-so percent slump in the bidding wars is above average. Jonathan Miller, the author of the Elliman Report and CEO of Miller Samuel Real Estate told The Real Deal that the number of sales, yet, stands 7.2 percent higher than the past decade’s on average. However, it’s still relevant that as the decline in luxury sales persists, the market in general is becoming more favorable for buyers.
Miller told Bloomberg,“this era of aspirational pricing is coming to an end. Buyers get the message first.”