2017 was a tale of two markets. The overall condo market remained relatively flat over the course of 2017, with units trading at an average price of $3.1M. On the other hand, the coop market showed growth, with the average sales price rising to $1.4M from $1.3M in 2016. The high end ($10M+) of the market saw the average price per sale go up from $18M to $20M, but there was a 20% drop in contract activity in 2017.
Takeaways from the year and predictions for 2018 include:
BIGGEST WINNERS AND LOSERS OF THE YEAR
- Highest Closed Sale: $65 million unit at 432 Park Ave
- Most Expensive Condo Building: 15 CPW with six sales averaging $7,350/sq ft
- Sales Volume: 56 Leonard, where 65 units sold for a total of $636 million or an average price of $9.8M per unit.
- Largest Price Fall: Trump International where prices fell 27% to $5.2M per unit. 11 Trump properties fell below Manhattan’s average for the first time
2017 AND BEYOND
- TRANSIT TO DRIVE DEMAND Areas to keep an eye on in 2018 are those near the East River Ferry expansion and L train shutdown. They will be likely targets for buyers looking for an easy commute or a bargain. The upcoming L-Train shutdown will likely have a large effect on surrounding properties next year. On the other hand, East River Ferry service is set to expand further in 2018, which should open up new opportunities in Manhattan and in outer boroughs.
- LUXURY VS ENTRY MARKET New development condos were the weakest segment in this year’s condo market, showing a 13% drop in sales volume relative to 2016 while the rest of the market remained mostly flat. We’re expecting luxury prices to hit new lows next year, with competition between first-time home buyers remaining fierce under $1 million.
- RENTAL MARKET CONTINUES DIP In November, Manhattan rents were down 1.9% year-over-year, falling in line with a nationwide trend of dropping prices in expensive markets. Keep in mind, the percentage decrease in price is really much larger however, it’s masked by the fact that landlords are offering major concessions (1-3 months free). The decline in rents is due to continued inventory expansion. More than 11,000 units are under construction in Manhattan, and another 24,000 are in the planning and permit stages. For those looking to lease in luxury price points in 2018, expect concessions.
We wish you a very happy holiday season and a great new year!