The Demand At Prices Set At 2014 Is Not There
A report from Bloomberg on New York. “Manhattan resale home prices tumbled by the most in more than four years, a sign that sellers are lowering their expectations in a slowing market where buyers have the option to walk away. The median price of previously owned condominiums and co-ops fell 6.3 percent in the fourth quarter from a year earlier to $900,000, according to a report Wednesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the first annual decline since the beginning of 2015, and the biggest since the third quarter of 2012, when resale prices dropped 8.1 percent.”
“‘Maybe we’re heading out of the period when there was no shame in overpricing your home,’ Jonathan Miller, president of Miller Samuel, said in an interview. ‘We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend? Part of selling is pricing correctly or being more negotiable.’”
From DNA Info. “Apartment bidding wars in Manhattan were at their lowest level in four years, according to a market analysis from Douglas Elliman. Drilling down into the data, bidding wars were less common for pricier markets. New developments, for instance, saw no bidding wars. ‘Increasingly, as the year went by, buyers possessed the upper hand; they balked at overpricing and waited sellers out,’ he wrote in his own market report. ‘On the listing side, 2016 was a year of price drops, often multiple, to position the subject properties for sale in the changed marketplace. While the year began with sellers firmly in charge of the market, December saw almost every sale negotiated, often from prices which had already been reduced several times.’”
“While the median price in Manhattan declined overall, the average sales price still hit a record high, reaching $2.098 million. It was up nearly 8 percent over the past year, according to Elliman data. But real estate expert Jonathan Miller, who authored the Elliman report, didn’t believe this accurately reflected the current state of the market since these sales included contracts that were signed a year or two ago in ultra-luxury new developments, but only closed last quarter when buildings were completed.”
“These ‘legacy’ contracts, as he calls them, propped up the prices. More recently, some luxury developments have been dropping prices, he added. ‘When a market like the super-luxury market is quiet, it’s not that the demand is gone, it’s that the demand at prices set at 2014 is not there,’ Miller said.”
From Forbes. “Swelling inventory and thinning demand are continuing to take a toll on Manhattan’s real estate market, several quarterly reports show. The drop-off is particularly acute at the top end of the market as developers of new luxury projects that now populate the skyline rush to cut deals in an effort to unload languishing units. The upper end of the market endured more softening with the median price on more expensive co-ops falling sharply. The median price of three-bedroom co-ops sold in the final three months of 2016 was $2.24m, down 12% from the same period in 2015, the Elliman report said. Sale prices of co-ops with four or more bedrooms were down 13% to $4.81m in the fourth quarter of 2016 from the same quarter in 2015. ”
“‘The paradigm shift with the Brexit vote combined with the uncertainty of the outcome of our election clearly put a damper on the transactional pace in the 4th quarter,’ says Robert Dankner, president of Prime Manhattan Residential.”
“Few real estate markets in the U.S. have enjoyed a sharper rise the past few years than Manhattan, where the average price of a home stands among the highest in the country. But despite a few record-shattering purchases, New York’s priciest borough is in the throes of a softening at the very high end as a glut of expensive condominiums floods the market and demand for top-tier properties taper off.”
From Curbed New York. “Brown Harris Stevens’ report pointed out some market changes in particular Manhattan neighborhoods. On the East Side, median prices for one and two bedrooms dropped slightly (to $722,500 and $722,500, respectively) while studios and three+ bedrooms rose (to $400,000 and $3.33 million). On the West Side, all sized apartments saw an increase in median price except three+ bedrooms, which experienced a 20 percent decline to a median price of $3.37 million.”
“Between 34th and 14th Streets, studio and one bedroom median prices decreased slightly (to $535,000 and $920,000) while two bedrooms increased 3 percent to $1.497 million. South of 14th Street, median prices were essentially unchanged except for two bedrooms, which had a 14 percent decline to a price of $1.7 million.”
From The Real Deal. “The average luxury sale price was nearly 9 percent less than the asking price at the time of contract, nearly twice as big of a discount seen in the previous year. ‘It’s a clear break from the somewhat irrational behavior of sellers from the previous three or four years,’ said Jonathan Miller, CEO of appraisal firm Miller Samuel.”
