Q3 2018 Manhattan Quarterly Market Insights Report

Q3 2018 Highlights

1. Manhattan Inventory

The overall number of active listings totaled 6,987 units in Manhattan at the end of Q3 2018, representing an 8% Y-o-Y increase compared to the same period in 2017. The increase was driven by both condo and co-op inventory at smaller unit types, which also indicated lower price segments, with listings asking below $1M up 24% Y-o-Y and listings asking between $1M-$3M up 10% Y-o-Y. In contrast, listings asking above $10M declined 26% Y-o-Y to 317 units in Q3 2018, mainly attributable to a few reasons: 1) stale and aggressively priced inventory finally getting absorbed as sellers become realistic regarding price expectations and 2) developers delivering units that have attainable price points as they capitalize on the shift in market demand from ultra-luxury large units to more efficient units.
The overall Manhattan median asking price continued to decrease in Q3 2018 by 11% Y-o-Y to $1.55M compared to the same period in 2017. As aforementioned, sellers reduced asking prices and accepted further discounts to seal the deal; we see these factors as positive signs for prospective buyers. Condo median asking price declined 9% Y-o-Y to $2.2M, registering the lowest asking price in 4 years since 3Q 2014. While co-op median asking price declined 13% Y-o-Y to $995K, registering the lowest asking price in 3 years since 3Q 2015.
* Q3 2018 inventory as of September 15, 2018

2. Manhattan Contracts Signed

The number of contracts signed totaled 1,948, reflecting a slight 1% Y-o-Y decrease during Q3 2018. The 4% Y-o-Y increase in the number of co-op contracts signed (1,081 units) almost balanced out the decline in the number of condo contracts signed (-7% Y-o-Y, 867 units). Aligning with the aforementioned decrease in ultra-luxury inventory, the best performing price segments were $5M-$10M and $10M+. The 30% Y-o-Y increase in the $5M-$10M category was primarily driven by contracts signed in several new development buildings such as The Belnord at 225 W 86th Street and 100 E 53rd Street. With regards to contracts signed last asking $10M+, co-op sales on the Upper East Side primarily contributed to the 10% Y-o-Y increase in this price segment. As of Q3 2018, there were 8.5 Months of Supply to be absorbed in Manhattan, indicating a relatively healthy market.
In terms of overall median contract price, it increased 4% Y-o-Y to $1.2M this quarter from $1.15M during Q3 2017. The slight upswing was primarily attributable to a 9% Y-o-Y increase in co-op median contract price. However, the increase in median contract price was combined with significantly prolonged median days on market (104 days in Q3 2018 vs. 83 days in the same period prior year). It is notable that this Y-o-Y increase in days on market was driven by contracts signed below $3M as opposed to contracts signed above $5M. With regards to the Y-o-Y increase of contracts signed between $5M-$10M this quarter, it is comforting to see median days on market shortened significantly by 79 days to 126 days from 205 days in Q3 2017.

* Q3 2018 contracts signed as of September 15, 2018

3. Manhattan Closings

The total number of closings decreased 18% Y-o-Y during Q3 2018 to 2,616 transactions, consisting of 1,163 condos (44% of total) and 1,453 co-ops (56% of total). Furthermore, all price segments exhibited Y-o-Y sales price declines ranging from 6% to 33%. Closings above $10M saw the lowest Y-o-Y percentage decline of 6% from 55 closings in Q3 2017 to 52 closings in Q3 2018. Closings between $5M - $10M declined by the highest percentage (-33% Y-o-Y), which was attributable to 34 clustered closings at Madison Square Park Tower in Q3 2017.
Median sales price declined by 3% Y-o-Y to $1.1M during Q3 2018 from $1.2M in Q3 2017, attributable to a 4% Y-o-Y decrease in condo median sales price ($1.6M), slightly offset by a 1% Y-o-Y increase in co-op median sales price ($855K). However, it is notable that this has been the 12th consecutive quarter since Q4 2015 that the median condo sales price has surpassed $1.6M. Negotiability, the median variance between last asking prices and closing prices, was -3.2% this quarter vs. -2% in Q3 2017. Notably, the $3M-$5M price segment had the deepest median negotiability at -6.6%. Median days on market for city-wide closings increased from 63 days to 70 days this quarter.

* Q3 2018 closings as of September 15, 2018