We've been seeing a weakening of the market for the past couple of years, with fewer closed sales, longer days on market, larger listing discounts and rising inventory. Finally, prices are lower. We were expecting this and have been preparing; it was only a matter of time.
Has Manhattan’s residential real estate market hit bottom and turned the corner, starting a recovery?
Or did we merely experience a stronger than normal Spring Bounce?
The big story in Q2 2019 was the number of closed sales which rose significantly year over year, and which spiked dramatically over Q1. There are a number of factors which contributed to this bump in sales.
Q1 saw the record closing of a unit at 220 Central Park South for $238,000,000. This sale alone skewed prices and average price per square foot upward. The contract for this unit was signed in 2015.
There was a lot of other top-of-the-market sales activity in Q1 as sellers became more aligned with market conditions. Listing discount, the difference between list price and sales price, rose to 6.9% from 5.5% year-over-year as sellers grew more willing to meet buyers at market levels to make the sale. Days on Market in Q1 2019 was 8 days shorter than Q1 2018, but 6 days slower than Q4 2018.
The sky is falling, or so it might seem. Some of our statistics this quarter look ominous, but peeling back the layers and using a laser focus, this on-going market adjustment is just that... an adjustment.