The always informative Elliman Report provides insight into Manhattan’s real estate market. This is a quarterly survey which we analyze to help buyers and sellers navigate the market.
Prices resumed its upward trajectory after taking a little breather last quarter. During the third quarter, the median price rose 4.2% year-over-year to $908,242. Interestingly, new development prices were strong, up 14.2% to over $1.6 million However, prices for existing homes also climbed. It was 2.5% higher to $878,000. The median is our preferred measure since the mean is influenced by extreme values. This is pertinent when discussing Manhattan real estate since there are ultra-expensive properties that are sold.
Interestingly, the increase in the sales price occurred as inventory continued to rise. Listing inventory jumped 27.6% to 5,828. The absorption rate or the time it would take to sell this amount at the current pace rose to 5.3 months from 3.6 months. The sales volume fell more than 13% to 3,328. The number of days on the market increased slightly, by four days to 92. This suggests better balance and a normal outgrowth of the strong recovery in the borough’s real estate market over the last few years. However, it would be a mistake to categorize it as a buyers’ market.
We concentrate our analysis on year-over-year data. Although it is useful to examine the statistics from one quarter to the next to see any developing trends, one must be cautious in concluding too much based on only one period since factors such as weather and seasonal trends.
The median price for lofts rose more than 10% to over $2.1 million. However, the number of listings rose 42.3% to 434 and properties were on the market longer, 121 days compared to 96 days.
Buyers also had a bit more negotiating room. The average discount compared to the list price was 3.2% compared to nothing a year ago.
We caution that it is difficult to draw too many conclusions since the sample size is fairly small. There are only a few hundred listings compared to over 2,000 for co-ops and condos. This can magnify changes.
Co-ops and Condos
The co-op and condo markets also had price increases, but other data such as the number of listings indicate a better balance between buyers and sellers.
The median price for a co-op was $737,500, 4.6% higher year-over-year. Listings rose 8.9% to 2,841. At the current pace, it would take 4.1 months to sell the inventory versus 3.3. However, pricing appears about right since there was only a 0.5% discount to the listing price compared to 2% last year.
The median price for a condo was nearly $1.3 million. The amount of inventory jumped over 50% to 2,987. It also took longer to sell. Days on the market were 95 days compared to 77. However, this did not make give buyers much more negotiating room. The listing discount increased to just 2.2% compared to 2%.
There may be some interpreting the data as a weakening market. We do not believe this is the case. Rather, it seems more likely the real estate market is normalizing after buyers and investors scooped up bargain basement prices. Although there may be some quarters that show weaker data, overall, it is likely to remain a healthy market going forward as mortgage rates remain low, and employment is strengthening.