TOWN Residential Analysis of the Manhattan Real Estate Market Sheds Light on First Quarter Market Conditions and Trends

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New development closings contributed to a boost in the blended first quarter numbers to new record levels of $2,185,452

First Quarter Market Snapshot/TOWN Residential

Trophy properties, from $10-30M, have gone into contract during the 1st quarter. The common denominator is the asking price of these properties was significantly higher in 2015. As the sellers adjust their expectations, buyers are writing checks.

TOWN Residential, New York’s leading luxury real estate services firm, has released The Aggregate - the firm’s quarterly residential market report. The first quarter 2016 report reveals that new development closings contributed to a boost in the blended first quarter numbers to new record levels of $2,185,452 – a 9.26% increase of the previous quarter’s average sales price. While the price inflation is most seen in condominium sales, the Manhattan average sales prices posted a 14.08% gain. Median sales price showed an even more impressive 17.92% improvement, rising to $1,200,000.

Looking specifically at Manhattan condominiums, the report reveals an 11.01% increase in average sales price during the first quarter of 2016, to $2,891,087, while notching an impressive year-over-year gain of just less than 20%. Median days on market for condominiums ticked up 4.62% to 65 days, a reflection of increased inventory levels from the seasonally slower winter quarter.

The average price of a Manhattan co-op also increased during the first quarter, rising 2.71% from $1,259,917 to $1,295,061. On a year-over-year basis, the median co-op price rose 5.81% with median price per square foot trends confirming this gain, rising both quarter-to-quarter and year-over-year.

“2016 has emerged as a market with natural dynamics at play and is demonstrating the effects of the recent wave of uncertainty experienced within the global and equity markets,” said Andrew Heiberger, founder and CEO, TOWN Residential. “There were an estimated 2,388 contracts signed during the first quarter, a 22% reduction from the same period last year.”

“We are encountering a very price-point specific marketplace with wide disparity in the pace of demand within the various sectors. Properties priced under $2 million are met with a continued flurry of activity while the pace of the ultra-luxury market has slowed considerably,” said Wendy Maitland, President of Sales, TOWN Residential. “Buyers in the $2 million and under segment have not experienced any real slowdown in activity or influx of inventory. This is met with contrast by the mid- to high price points where buyers are starting to see some relief and sellers have begun to adjust their price expectations and become much more cognizant of buyer sensitivities.”

“Within the first quarter of 2016, 604 Manhattan properties saw price reductions, with the average reduction 5.88% off of last asking price. Within the $10M+ segment alone, we saw 29 price corrections with an average of 9.54% off of last asking price,” Heiberger added. “Many of the properties experiencing price corrections – whether in new developments or in the resale market – are among the best and most desirable in terms of location, finish, and value. Within our market, a correlation is drawn between days on market and perceived quality when quite often the property’s only ‘defect’ is price.”

"While the most recent first quarter reports show a continued boost in Manhattan prices, it is important to consider that this may largely be credited to the closings within new developments - where contracts were signed months, and even years earlier," said Shlomi Reuveni, Managing Director, TOWN New Development.

“Mirroring the luxury sales market, we are seeing significant price corrections within the $20,000+ luxury rental market as well with reductions averaging 19.24%,” said Itzy Garay, Executive Vice President of Sales and Leasing, TOWN Residential. "Despite the seasonal slowdown, vacancies are accumulating. This is another avenue of opportunity for Manhattan’s savvy consumer."

Examining the individual neighborhoods, The Aggregate revealed a mixture of increasing and decreasing price trends during the first quarter.

"Trophy properties, ranging from $10-$30 million, have gone into contract throughout the city during the first quarter of 2016. The one common denominator is the asking price of these properties was significantly higher in 2015,” Heiberger said. “As the sellers adjust their expectations, buyers are writing checks."

The Aggregate is a comprehensive study of residential sale transactions across distinct asset classes from January through March 2016. The report compares those transaction values with quarter-over and year-over values, while providing invaluable insight into current trends and market conditions. Data is drawn from the rolling sales data of the Manhattan market along with the live ACRIS feed provided by the New York City Department of Finance.

About TOWN Residential -
Founded in 2010, TOWN Residential has cemented its position as New York’s foremost luxury real estate services firm with an exhilarating foundation and seamless execution of best-in-class customer service by an unparalleled team of more than 550 Representatives and professionals strategically located in seven prime offices. TOWN Residential specializes in luxury residential sales; leasing; the marketing, sales and leasing of property developments; commercial and retail.

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Lori Levin
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