The days are getting shorter and the weather is getting cooler – two surefire signs that we are fast approaching the holiday season here in New York City. The fall season is typically our second most active season in New York City real estate, as business tends to heat up right before the seasonal slowdown associated with the holidays and frigid temperatures.
After a slower than average spring, and a weak showing in the summer months, our fall selling season has been a mixed bag. Overall, we are in a buyers’ market; however, depending on property type, price-point, and location, the level of decline and negotiability are varied. The condo, co-op, and single family market are demonstrating differences as are the different boroughs.
In the third quarter, Manhattan saw a year-over-year median sales price decline of 4.5%, according to Miller Samuel’s most recent report. Average sales price declined 7.8% from the prior quarter. At the same time, closed sales volume was down 11.3% and total inventory was up 13.2%. Co-ops fared considerably better than condos; co-ops experienced an average price decline of 2.4% from the prior quarter, whereas condos experienced a 10.4% price decline. Luxury listings fared worse; they experienced a 15.8% decline. New development condo properties are the most vulnerable segment of the market, which is why many developers are offering even more behind-the scenes concessions to move units.
Brooklyn actually saw a 6.9% increase in average sales price from the prior quarter. However, inventory buildup is most pronounced in this borough, where we saw an increase of 72.6% from the prior year. Current demand levels cannot support this level of listing volume, so expect a pronounced correction. One to three-family home inventory in Brooklyn is still relatively low, while demand remains high – making this one of the best performing segments of our market.
The Queens housing market, which had been red hot for some time is finally coming back to earth as well. Sales were down 5% borough-wide, while listing inventory increased by 18.1%. Areas like Long Island City and Astoria are seeing the highest levels of inventory, but neighborhoods to the east seem to have a healthier balance of supply and demand.
This confluence of factors has led to a fantastic opportunity for buyers, who have been waiting on the sidelines to get into the market and take advantage of the lack of competition, and still historically low interest rates. For a true win-win scenario, we have been encouraging our buyers to make offers taking into consideration a further correction, while simultaneously taking advantage before the interest rates jump. Buyers that in the past were losing out on the best properties to cash buyers, now have their pick of the litter, and all buyers have a great deal of negotiability. This is especially true for buyers of new construction property – where Developers are holding onto high levels of inventory. As their costs continue to eat into profits, and payments to investors come due, we are seeing a willingness to come down from their asking prices and levels of concessions that haven’t been seen in almost a decade.
Sellers looking to trade up are in the favorable position of being able to take advantage of the larger downward pricing shift on their more expensive purchase. And, sellers in certain segments of the market are still seeing enviable levels of competition. This is a market where correct pricing and proper positioning of a property is vital. We have seen some incredible successes for both our buyer and seller clients recently. Transitional markets are typically the times where smart money makes money – and experience maneuvering through this tricky terrain is of the utmost importance.
We will continue to keep you up-to-date on recent happenings and trends in the market, and hope that you have found this market update informative and useful. As always, please reach out with any questions on how you can take advantage of these current trends, or how to protect your real estate assets. We can also offer a wealth of knowledge regarding specific trends or segments of the market. As always, The LevinKong Team is available to serve all your New York City real estate needs, and those of your friends, family, and colleagues.