The NYC real estate market held steady during Q2 despite signs of softness in the pace of contract activity and days on market. Median sale prices increased 6.03% to $1,220,000 from a year ago and improved 5.02% from Q1. While year-over-year price improvements suggest current values are sustainable, a significant year-over-year increase in days on market from 56 to 75, combined with an earlier than usual slowdown for Q2 contract activity indicates that softness still exists, especially in higher price sectors. Barring any market shocks, we expect prices to remain stable as we head into Q3.
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Some factors to consider:
- NEW DEV DILEMMA The number of new condos on the market hit 5,936 units during the second quarter, up 35% year-over-year. Even with the gush of inventory, there were just 350 contracts signed on new development condos during the quarter, a 23% drop from the prior year. With new inventory on the rise, coupled with the number of signed contracts falling, developers aiming for high-priced sales may find that the cycle has passed them by. We expect to see more negotiation and price drops than we’ve seen in the past in this sector.
- RARE DROP IN RESALE Listing inventory for Manhattan dropped in Q2, with the steepest drop at the high end of the market. Resale inventory, which represents 83% of the Manhattan market, dropped by more than 1%. This is the first decline since early 2014. In the luxury market (above $4.8M), inventory dropped by 11%, with resale inventory in that sector falling by nearly 23%. We’re attributing the drop in inventory to overpriced listings expiring and being removed from the market.
- CONDOS The Manhattan condo market generated strong, but occasionally mixed, results from both a quarter-to-quarter and year-over-year viewpoint. Viewed on a yearly basis to filter out seasonality, the median price per square foot improved 2.73% to $1,626. On a quarterly basis, the median price per square foot rose 2.03%. While days on market improved on a quarterly basis, decreasing to 85 from 93, it now takes over three weeks longer to sell a condo than it did a year ago.
- CO-OPS The traditionally stable co-op market saw modest median price growth on both a quarterly and year-over-year basis. The median price for a Manhattan co-op in Q2 was $816,475, which represents a 7.57% gain from Q1 and a 4.79% gain from last year. Similar to the overall market, days on market increased during the quarter, with approximately 69 days needed for a co-op sale. Transaction volume also increased across all price ranges over the year, most notably in the $1M-$2M and $5M-$10M sectors.