The Manhattan residential real estate market continues to be cool. Buyers have the leverage as inventory and days on market increased in the second quarter of 2019. The second quarter showed positive signs with both sales and contracts signed activity up, however, the market continues to see discounts off listing prices. The market requires sellers to price right, expect to negotiate and be patient.
Q1 Decline Turns into Moderate Growth
Declining sales seen in the first part of the year have turned to moderate growth with 2,380 recorded sales this quarter, up 31% from the first quarter, and 7% higher than second quarter last year. The total number of sales this year to date is on pace with the first half of 2018, down only 1% year-over-year.
The number of contracts signed increased, with 3,196 contracts signed, up 29% from the first quarter and 3% from this time last year. While this marks a positive trend, other metrics of the market paint a landscape which will require close observation and strategy in the second half of the year.
Time on Market Rises
Properties spent a notably higher time on the market this quarter at an average of 168 days, up from last quarter’s peak. In addition, the average price slumped 5.8% for sales and 9.3% for contracts with an average 8% discount, up 1% from this quarter last year. Inventory climbed 7% from the first quarter as well, many of which are smaller in size on average.
Real Estate Buyers Are Taking Their Time
It is clear Manhattan is seeing more buyers, but those buyers have more options and are taking longer to make decisions. The new mansion tax taking effect July 1, 2019 drove some activity, evidenced by a slight increase in contracts in June, but most buyers remained patient. How this tax truly impacts the market will be seen in the coming months.
With the upcoming election cycle in the United States, uncertainty for buyers will continue. The objective observation of market conditions will be crucial. We anticipate deals to continue taking longer than usual but also expect the increased sales and contract activity to persist as we move into the heart of summer and interest rates remain at incredible historic lows.
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