Average price of Manhattan homes fell below $2m for the first time in 7 quarters

The average price of Manhattan homes fell below $2 million for the first time in seven quarters and sales activity for the Manhattan housing market was at the lowest fourth quarter total in six years as well, according to Douglas Elliman Real Estate’s Q4 2017 Manhattan Market Report.

“This can be attributed to final moments of the new development contract pipeline where deals signed several years ago have closed once construction was completed,” said Steven James, CEO of New York City, Douglas Elliman. “Amid all the changes and uncertainty since Labor Day, the market is seeing modest median price growth, bidding wars remaining above average and resale inventory still fairly tight overall — especially in the entry and mid-markets.”

Buyers continued to hold firm, forcing sellers to meet them on price. Smaller apartments continued to see more bidding wars than larger apartments and 90 percent of sales at or above $5 million were “all cash”. New development inventory expanded annually for the sixth consecutive month as well, but the growth rate cooled.

The Northern Manhattan market showed a declining supply of both apartments and townhouses, with a slowing of sales due to lack of supply. Price trends in Northern Manhattan remained mixed. Additionally, like the rest of the borough to the south, housing sales slowed due to similar hesitation about the tax bill.

Median sales prices also showed three straight quarters of growth, led by re-sales, said James.

“I'm not forecasting the price impact of the tax bill yet, but I am saying it has more of an effect on the higher end and it will take buyers and sellers a while to sort it out over the next year or two,” added Jonathan Miller of Miller Samuel Inc., the author of the report. “I expect that in the near future, buyers will come in lower on offers initially and sellers will resist, a repeat of what we have been seeing. However, I wouldn't be surprised to see a sales pickup in first quarter 2018 as fall’s pent-up demand is released.”