GRIDLOCK – AND SELLERS PAY THE PRICE
The number of homes listed for sale jumped to near-highs in Manhattan, according to StreetEasy’s Q3 2019 Market Reports. This latest data shows no imminent change to the gridlocked dynamics of New York City’s sales market, where stubbornly high asking prices, especially in Manhattan, have driven away many potential buyers.
The increase in for-sale inventory also means greater competition among home sellers. But those sellers are not responding with more price cuts: the share of listings with a price cut remained basically unchanged from last year. In Manhattan, this figure fell to its lowest level of 2019, with 23.7% of sellers offering a discount. The share of price cuts offered in Brooklyn rose just one percentage point to 22.3%, and it remained about the same in Queens, at 19.3%.
Nor are sellers willing to meet buyer demand with deeper discounts. The median size of price cuts in Manhattan, Brooklyn and Queens remained unchanged since last year, at 5.3%, 5.1%, and 4.3%, respectively.
Still further signs of a lagging sales market can be seen in price growth. In Manhattan, the StreetEasy Price Index fell 4.4% to $1,093,562 — its lowest level since 2015. These figures, calculated using data on home sales that closed, show that the sellers who priced their homes at more realistic levels were the ones who found buyers.
“Most sellers are still refusing to bow to the buckling market, causing would-be buyers to turn to the rental market, where they are finding a lot to like,” says StreetEasy Senior Economist Grant Long. “Until sellers recognize that prices are not what they once were, those with the means to buy will continue to play the waiting game from the comfort of their rental. With job growth in the city continuing to support demand for homes, we expect to see an unusually competitive winter in the rental market, including likely record rates of rent growth.”
According to UrbanDigs.com, where Manhattan real estate data is analyzed at a granular level in real time, price per square foot continues its 2-year decline, and in Q3 of 2019 was down 3% from last year’s levels. Days on market — the time it takes to find a buyer and get a property under contract — rose almost 8% over Q3 of 2018.
And according to Miller Samuels, one of the leading appraisal companies and real estate data providers in NYC, the number of closings in Q3 was down almost 15% from the previous year, and the absorption rate has skyrocketed up 24% to about 9 months — the slowest absorption rate seen in Manhattan for years.
Q3 2019 Key Findings — Manhattan
• A smaller share of homes received price cuts. While unchanged on an annual basis, the share of price cuts was the lowest in 2019 at 23.7%. The share of price cuts fell most in the Upper West Side, down 4.1 percentage points to 22.8%.
• Prices dropped to 2015 levels. The StreetEasy Manhattan Price Index dropped to $1,093,562, a 4.4% decrease from last year. Prices fell the most on the Upper East Side — down 4.8% to $955,277.
• Sellers refused to offer larger discounts. The median price cut on homes in Manhattan was 5.3% of the asking price — unchanged since last year in all Manhattan submarkets.
• There were 915 more homes on the market. For-sale inventory increased 7.7% in Manhattan from a year prior, pushing the total number of homes for sale to just under 13,000.
• Rents rose at their fastest pace since 2015. The StreetEasy Manhattan Rent Index rose to an all-time high of $3,318 – up 3.0% from last year.
To get the full report, complete with data charts, as a downloadable PDF:
Every situation, property and seller is different. To understand how these market dynamics affect you, and how to properly position your property for a sale in today’s market, it’s important to have expert advice and guidance.