Manhattan’s would-be home buyers are in no rush to make deals, while the number of condos and co-ops on the market continues to rise. Here’s what you need to know in the Manhattan real estate market!
The Q1 Manhattan Real Estate Market Breakdown
The total number of active listings surged at the end of Q1 2019 in Manhattan, continuing to be a pronounced buyer’s market. Inventory experienced a 12% Year-over-Year (Y-o-Y) increase and a 9% Quarter-over-Quarter (Q-o-Q) increase. This increase was primarily attributable to co-ops (+14% Y-o-Y) and resale condos, which seemed to be partially associated with the tax season and State and Local Tax (SALT) changes. New York experienced the highest available inventory for Q1 since 2009. Listings asking below $1M, the most sensitive price segment, saw the largest increases in the number of available units (+26% Y-o-Y) compared to other price segments. Additionally, Mansion Taxes, imposed on homes over $1M at 1% under the old law, increased progressively ranging from 1% to 3.9% for properties over $1M. The new law went into effect on April 1st, 2019 and should begin to influence the market for properties over $3M next quarter.
The Manhattan real estate market median asking price decreased 9% Y-o-Y as sellers became more realistic about the market and expectations. Both condo and co-op median asking prices decreased this quarter.
The contracts signed in Q1 2019 experienced a 6% Y-o-Y decline from Q1 2018. Total condo contracts decreased 21% Y-o-Y this quarter, moderately offset by a 7% Y-o-Y increase of co-op contracts. Units under $1M were the only price segment with increased total contracts signed at 7% Y-o-Y, driven by a 14% Y-o-Y increase in co-op contract activity this quarter. This trend aligned with the previous quarter at the end of 2018 as lower-price-point co-op contracts continued to show fundamental demand in the market, fueled by the lower mortgage rates and changing tax policy. With the new progressive mansion tax and NYS transfer taxes, we may observe more buyers transacting in lower price segments next quarter.
As mortgage rates fell back to their lowest levels in more than a year, the amount of each year over year sales decline eased. Affordability concerns, the disconnect of the housing market from the robust overall economy, and the new federal tax law have all played a role in the uncertainty that has tempered sales.
Still, the key spring selling season will bring out New Yorkers who are willing to take advantage of the deals others passed up. There are opportunities out there. If you find a seller who is willing to negotiate, a deal is possible.
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