It’s official: New York’s real estate market is in a slump. (Or, if you’re a buyer, you could look at it this way: Now’s the time to strike if you’ve been waffling on whether to buy a place.)
The latest batch of market reports, looking at Q4 sales in Manhattan, are here, and there are some commonalities among them; namely, the fact that median prices are falling (in the case of Douglas Elliman’s report, they’ve dipped below $1 million for the first time since 2015); the number of closed sales is decreasing, while inventory is up; and apartments are spending more time on the market.
(Average prices, however, are up—this is largely due to closings at high-profile, high-priced buildings, like 220 Central Park South and 520 Park Avenue.)
“It looks like 2019 market sales and prices might show us ‘more of the same’ as the federal tax law and higher rates play a crucial role in the housing marketplace,” Jonathan Miller, the author of the Elliman report, said in a release.
But, as Miller notes, the activity in Q4 isn’t new; it’s part of a larger shift—what he calls “reset mode”—in the market that’s been felt throughout 2018, as a glut of pricey new apartments (some in developments that have been in the works for years) appeared, and factors outside of the real estate world’s control (such as volatility in the stock market, and what Corcoran calls “political distractions”) gave buyers pause. The New York Times reports that, per Miller, inventory is up 12 percent over what it was in 2017.
How is this good for buyers now? Aside from the obvious—prices dropping may not be great for brokerages, but it’s definitely a plus for those looking to buy a place—it also means that there are fewer bidding wars, and more instances of developers offering big incentives to buyers. (See: Extell luring buyers with the promise of paying their common charges for up to five years.) And these conditions are likely to continue into 2019; the Wall Street Journal reports that some brokers have taken to advising clients to wait to buy until prices decline further.
“[M]any prospective buyers are choosing to wait on the sidelines until prices adjust to a more accessible level and other market factors calm,” Corcoran CEO Pamela Liebman said in the brokerage’s report.