2017 ended up with a modest 6% increase over 2016 in the number of contracts signed at $4 million and above in Manhattan. Year-to-date, 1,172 contracts were signed, totaling $9,104,329,032. The 1st and 2nd quarters of 2017 were strong. The third quarter was weak, and the 4th quarter rebounded with a performance equal to 2016.
Still, 2017 does not come close to the golden years of new development--2013 to 2015--when a surge of buyers clamored for new construction. Overall, when you drill down into 2017's numbers, there are no wide swings in price or $/square foot over each of the last 4 years.
One noticeable difference: the length of time on the market was 433 days, up from 318 days in 2016. You read that right - it took almost 4 months longer to sell a luxury property in 2017 than in 2016. This is a continuing trend that reflects an overpriced market, in which a typical property had to drop its asking price by 8% before it could find a buyer. This trend further demonstrates that there is clear buyer resistance if the property is not priced correctly from the start.
The steepest fall from grace was in the townhouse market. Only 100 contracts were signed, 11% below last year. The reason: The cost of renovating has skyrocketed due in large part to labor shortages, while at the same time the new condo market offers increasing competition with an expanding supply of large units offering state-of-the-art infrastructure and robust amenities.
As always, a few bright spots at the top were evident. One buyer went on a shopping spree in early December, purchasing three adjoining penthouse condos at 432 Park Avenue for a total of $91,125,497 for 11,906 square feet. A record-breaking townhouse sale was also in the mix: 12 East 69 th Street went to contract for $80 million, reduced from $114 million when it was listed in 2014. The 40-foot-wide house has 20,000 square feet and was sold to a buyer from China.
As for 2018, the big question is: What will be the effects of the new tax law, which caps state, local, and property tax deductions at $10,000, on the Manhattan luxury market?
Stay tuned.
Contracts Signed $4 M and above | 2013 | 2014 | 2015 | 2016 | 2017 |
# of Co-op Contracts $4 million and above | 288 | 282 | 296 | 222 | 252 |
# of Condo Contracts $4 million and above | 905 | 891 | 904 | 751 | 810 |
# of Condop Contracts at $4 million and above | 49 | 14 | 14 | 17 | 10 |
Total # of Contracts Signed on Apartments | 1242 | 1187 | 1214 | 990 | 1072 |
# of Townhouse Contracts $4 million and above | 130 | 153 | 130 | 112 | 100 |
Total # of Contracts Signed Apartments + Houses | 1372 | 1340 | 1344 | 1102 | 1172 |
# of Contracts Purchased from Sponsors/New Development | 475 | 481 | 456 | 435 | 440 |
# of Contracts Signed Asking $10 million and above | 252 | 270 | 227 | 215 | 200 |
Total Volume | $10,854,826,824 | $11,256,284,299 | $10,738,479,892 | $8,937,866,862 | $9,104,329,032 |
Average Asking Price | $7,851,594 | $8,140,776 | $7,940,624 | $8,090,463 | $7,761,413 |
Median Asking Price | $6,366,072 | $6,440,048.00 | $6,289,375 | $6,367,820 | $6,149,606 |
Average Price Decline Before a Signed Contract | 3% | 4% | 5% | 6% | 8% |
Days on Market | 172 | 181 | 243 | 318 | 433 |
Condo Average Asking Price | $7,719,542 | $7,832,105 | $7,739,656 | $8,099,463 | $7,868,236 |
Condo Average Asking $/sq.ft. | $2,766 | $2,783 | $2,825 | $2,929 | $2,874 |
Condo Average Size | 2,814 | 2,801 | 2,731 | 2,755 | 2,725 |
Co-op Average Asking Price | $6,756,788.00 | $7,727,973 | $7,280,086 | $7,063,249 | $6,665,210 |
Townhouse Average Asking Price | $9,514,252 | $10,256,784 | $10,993,444 | $10,400,788 | $9,559,078 |
Townhouse Average Asking $/sq.ft. | $1,750.00 | $1,829.00 | $2,077.00 | $1,944 | $1,897 |
Townhouse Average Size | 5,553 | 5,621 | 5,288 | 5,531 | 5,208 |
East | West | Midtown | Downtown | Asking $/sq.ft. | Totals | |
---|---|---|---|---|---|---|
2017 Apartments |
252 | 178 | 132 | 510 | Avg. Co-op Ask: $6,665,210 Avg. Condo Ask: $7,868,236 Avg. Condo Ask: $2,874/sq.ft. Avg. Condo Size: 2,725/sq.ft |
1,072 |
2016 Apartments |
195 | 161 | 138 | 496 | Avg. Co-op Ask: $7,063,249 Avg. Condo Ask: $8,099,463 Avg. Condo Ask: $2,929/sq.ft Avg. Condo Size: 2,755/sq.ft |
990 |
2017 Townhouses |
29 | 28 | 11 | 32 | Avg. Townhouse Ask: $1,897/sq.ft. Avg. Townhouse Size: 5,208 sq.ft. |
100 |
2016 Townhouses |
32 | 32 | 5 | 43 | Avg. Townhouse Ask: $10,400,788 Avg. Townhouse Ask: $1,944/sq.ft Avg. Townhouse Size: 5, 531/sq.ft |
112 |
Donna Olshan President dso@olshan.com |
Emily Chen Private Wealth Real Estate Services Chief of Research ecc@olshan.com |