Q2 2017 Highlights
Contract activity in the second quarter was essentially flat compared to the same period last year as pricing metrics continue to test record highs. Equity markets, which are typically highly correlated with luxury residential sales in New York City, have also plateaued near all-time highs and interest rates remain suppressed despite three interest rate hikes from the Federal Reserve since December 2016. This macroeconomic environment is likely contributing to relative renewed strength in the high end of the market. Aspirational pricing led to increased buyer patience, however, as Time on Market increased 12% year-over-year to a median of 74 days.
Overall available listings decreased 4% year-over-year to 9,390 units compared to 2Q16, driven by roughly equivalent drops in condo (-3% Y-o-Y) and co-op (-4% Y-o-Y) inventory. The overall number of available units above $10M decreased 11% year-over-year, a positive sign for the market. The number of condos in the $3M-$5M range increased 9% year-over-year, primarily driven by new development inventory at One Manhattan Square, 200 E 62, and 50 West. The median asking price of co-op inventory increased a substantial 10% year-over-year to reach the highest asking price at $1.1M.
The 2,980 condo and co-op contracts figure in 2Q17 was flat compared to 2Q16. The 16% year-over-year increase of condo contracts in the $5M-$10M category exceeded all other price brackets, and amazingly a contract was signed in this price category in 37 different new development properties, which indicates strong buyer interest in this price range. The largest year-over-year increase in the number of contracts signed occurred on the Upper East Side (+12% Y-o-Y), extending the trend from 1Q17, which we believe was primarily attributable to the opening of the Second Avenue subway. The median condo contract price of $1.8M was the second-highest on record, and the median co-op contract price of $879K represented the highest price on record. Please note that median prices of contracts signed represent last asking prices and do not take into consideration new development properties which decline to report sales.
The number of condo and co-op closings decreased 18% and 4% year-over-year, respectively, led by softness in closing activity for units priced under $1M (-14% Y-o-Y). However, the ultra-luxury condo market ($20M+) saw strong activity, increasing 20% year-over-year, attributable to high-priced closings at 56 Leonard and 432 Park Avenue. FiDi & BPC had a notably strong quarter with a 23% increase in the number of closings and a 49% increase in median closing price primarily attributable to over 30 closings at 50 West Street. Both condo and co-op closings achieved all-time high median prices.