According to recent reports the median sales during the third quarter homes in Manhattan have dropped under $1 Million, some speculating to the new taxes on higher-end homes.
Looking back to last quarter's report, the results are in on the newly-established Mansion Tax in New York: it prompted a large number of sales in a race to beat the July 1, 2019 deadline. Since then, buyers are uncertain. The new tax coupled with recession speculation has slowed and shifted the market. Manhattan saw 12% fewer sales this quarter compared to 2018. The increased sales were seen in 2015, 2016, and 2017 deserve consideration, however, and 2018 and 2019 trends are suggestive of market normalization, not crash.
According to Compass For $3M and above, the fewest since 2015. Many look back to 2008 and want to avoid purchasing at the wrong time, so even with low mortgage rates, buyers are appropriately re-evaluating their price range and opting for something slightly less expensive. De- clines in overall average price and average size but the limited reduction in average price per square foot supports this.
The Halstead’s Third Quarter 2019 Market Report, states that the volume of Manhattan apartment sales dropped 16% from the third quarter of 2018, with sales over $5 million falling 48%. This pushed the average apartment price down to $1,652,565, 13% below a year ago.
“Increases in transfer and mansion taxes starting July 1st pushed buyers and sellers to close before the end of June. Unsurprisingly, this led to higher-than-usual activity in high-end sales last quarter. Third quarter data reflects a more accurate snapshot of the current market – continued price correction. We remain in a buyers’ market and looking towards the end of the year, we expect sellers to price sharply and realistically to get deals done,” said Diane M. Ramirez, Chairman & CEO of Halstead.
All is not lost while, the Warburg Realty’s Q3 report by CEO Frederick Warburg Peters claims the New York real estate market is finding equilibrium as the market continued to stabilize over the summer. While agents still find the market extremely challenging (particularly at the ultra-high-end), there is an overall sense that prices are settling at a level anywhere between 10% and 20% below their 2015 highs. And, as that happens, some buyers recognize a moment of opportunity and see these price reductions and less expensive asking prices as invitations to re-enter the market.