Photo: Robert Clark
Over the last quarter, a perfect storm of factors collided to create one of the most perfect buyer’s markets seen in recent Manhattan history.
Homebuyers had more choice and time to make a decision. Add in lower prices, the ability to negotiate, lower interest rates and easier access to financing in the third quarter, and you’ve got Manhattan in the third quarter, according to a report released today by New York brokerage Compass.
Prices in Manhattan were up 3.4 percent annually to $1.6 million last quarter, including both co-ops and condos. But while prices were up overall, new construction condo prices fell 33 percent from last year to $2.3 million in the third quarter.
“A larger percentage of new development apartments that have closed are smaller, more ‘attainable luxury’ rather than a large swath of ultra-luxury apartments that closed in prior quarters such as those at 432 Park Avenue, Greenwich Lane, 56 Leonard, 150 Charles Street, and 30 Park Place,” Compass President Leonard Steinberg tells BuzzBuzzNews.
Total inventory was up over 3 percent from last year to 9,481 units in the third quarter.
Condos accounted for 55 percent of the market’s total inventory, or 5,224 units. Studio inventory increased 21 percent annually to 399 units, the only unit type to record double-digit gains — yet studios only made up 7.6 percent of total inventory in the third quarter.
Some 2,254 contracts were signed in the third quarter, over half of which were co-ops. Condo closings were up 17 percent annually, while co-ops were up 12 percent from the same time last year.
With prices down, new construction condo closings soared 32 percent from last year to 475 units in the third quarter, “driven primarily by the $1 million to $3 million price bucket which represented 48 percent of the listings sold.” Although many of these sales were, in fact, signed months ago, says Compass.
Homes were on the market an average of 60 days last quarter, up 10 days from the same time last year. Meantime, homes priced above $20 million were on the market an average of 437 days in the third quarter — 150 days longer than last year.
Overall closing prices were 3 percent lower than asking in the third quarter, while homes priced above $20 million saw prices cut 30 percent. Last year at this time, the difference between asking and closing prices in the $20 million and above submarket was only 9 percent.
With financing readily available and low interest rates, the market is very buyer-friendly — for now.
“In bad markets, prices may be down, but obtaining financing is super-tough if not impossible,” says Steinberg.
But, as the old adage goes, he who hesitates is lost. Buyers should strike while the iron is still hot.
“Buyer’s markets never last too long in New York, especially when interest rates are low and the equity markets are at record highs. This is a buyer’s ‘moment’ and they come and go relatively quickly,” Steinberg tells BuzzBuzzNews.
Click here to read the entire report.