We hope that you are enjoying the beginning of spring. Here in NYC, we are loving the busy selling season that accompanies the much appreciated warmer weather! Both are welcome changes after those long winter months and the slower sales pace. We are still seeing market conditions that vary widely across price segments and neighborhoods, the now numerous ‘micro-markets.’ In general, though, we are observing faster sales and increased transaction volume.
After a sluggish 2016, the Luxury sector has seen a vast improvement in deal velocity and volume. The number of homes selling above $4 million is up 33% in the first quarter of 2017 compared to the same period in the prior year. Brooklyn’s record-breaking condo sale occurred in the first quarter of 2017. The $15 million Dumbo Clocktower penthouse sale shattered the prior high-water mark of $10 million for a Brooklyn condo. We also saw the highest ever sales price recorded for a Manhattan townhouse in April, at a staggering $79.5 Million. Much of this activity is the result of sellers finally giving up on their aspirational price tags and coming down to the expectations of buyers. Some of the listings that languished on the market for extended periods saw final price concessions as high as 30% to achieve a deal.
The sub-$1.5 million dollar market has continued to show great strength throughout Manhattan, Brooklyn and Queens. In Manhattan, April saw 25% of sales in this segment go above asking price. A combination of expected increases in the consumer interest rate and less than two month’s supply of inventory in the lower price-points has led to jam-packed open houses, bidding wars, and hyper-competition.
It is the middle of the market, homes asking between $1.5 million and $3.5 million, where we have seen a bit of a stalemate between buyers and sellers. The misaligned expectations and differing opinions on where the market currently sits in this segment has led to slower transaction pace and deal volume. Days on market has increased by as much as 35%. This is typically the bread and butter of the Manhattan market, in particular. However, we do anticipate that some of this inventory build-up will begin moving now that the selling season is fully upon us.
According to Jonathan Miller, CEO of Miller Samuel, Inc., who Seth Levin of The LevinKong Team had the honor of speaking on a panel with in April, average sales price in Manhattan is up 3% from the prior quarter and up 4.8% from the prior year. The average sales price for Manhattan has now reached $2,227,234. Some of this increase is certainly skewed upward by movement of luxury homes in the 1st quarter. Average sales price in Brooklyn was up 4.9% from the prior quarter and 25% from the prior year. The first quarter witnessed Queens average sales price experience a slight dip of 2.6% but a 17.4% bump from the prior year.
All in all, these numbers reflect a healthy sales market. The pent up demand resulting from the period leading up to the presidential election is fueling much of this activity. Whether a listing sells quickly, above or below ask, and whether an investment can be rented expeditiously is more dependent on price and location than we have witnessed in many years.
We will continue to keep you up to date on recent happenings and trends in the market. We hope that you find this information useful and, please, as always, reach out with any questions on how you can take advantage of these current trends or how to protect your real estate assets. Also, feel free to reach out with any questions regarding a specific trend or segment of the market. The LevinKong Team is available to serve all your New York City real estate needs and those of your friends, family and colleagues.