Stats for 2019’s first quarter show that as inventory continues to expand, transaction volume and sales prices are declining. Despite the recent highly trumpeted $238M condo purchase at 220 Central Park South, New York’s housing market remains sluggish. The good news is that mortgage rates are holding and even dropping, and despite an increase in the mansion tax, residential buyers retain the upper hand.
Following are some key takeaways from Compass’s Quarterly Market Insights Report for Q1 2019 for current inventory, contracts signed, closed sales and prevailing trends in 15 unique Manhattan neighborhoods. The complete report may be found here.
Active listings totaled 7,161 units, a 12% YOY increase; inventory gains were highest in Harlem and Upper Manhattan with a 43% YOY uptick in supply, driven partly by new development offerings.
Manhattan experienced the highest available inventory for Q1 since 2009.
The number of listings priced below $1M rose 26% YOY, which means competition among sellers for first-time buyers is increasing. As the inventory of studio and one-bedroom units rises, the pace of trading in this category has slowed.
Median days on the market stayed roughly the same YOY at 117 days.
The number of contracts signed in Q1 2019 represents a 6% YOY decline from Q1 2018 but is only 4 signed contracts more than Q3 2018. The neighborhood with the highest increase in the number of contracts signed was Gramercy with an increase of 23% YOY, primarily from new development sales.
Tribeca scored as the Manhattan neighborhood with the highest median contract price at $3.9M; however, the number of signed contracts in Tribeca actually dropped 8% YOY.
Gramercy recorded the highest YOY increase in the number of closings to 42%.
Midtown West outperformed other areas in median closing price by 65% YOY thanks to sales at 220 Central Park West and Hudson Yards.
The overall number of closings in Manhattan declined 13% YOY to 2,007, accounting for a 19% decrease in condo sales and an 8% decrease in co-op sales. This was actually the lowest level of first quarter sales in a decade.
Two notable markers stand out in Donna Olshan’s weekly review of signed contracts over $4M. In her report for the week ending March 31, 2019, she notes 516 days on the market as the average and the longest seen in any quarter since she started tracking in 2005. She attributes the nearly one-and-half average years on the market for high-end properties to “pervasive overpricing.” In her report for the week ending April 14, 2019, she notes only 17 contracts were signed over $4M, and only 3 of those were at new developments. At Elliman, Jonathan Miller notes a similar dismal stat for new condominiums: the fewest quarterly closings in his 16 years of tracking, and the lowest sales volume in four-and-a-half years, down more than 39% YOY.
The market deflation with expanding inventory, increasing time on the market and dropping prices bodes well for buyers in all price categories. As of April 10, the average 30-year fixed mortgage rate is 4.28% down 1 basis point from the week prior, and 15-year fixed mortgage rates rose 2 basis points to 3.65% from a week ago.
Uncertainty causes people to avoid risk and make fewer changes. Nonetheless families grow, employees relocate, and estates need to be settled. Our friend in Omaha says, “Be fearful when others are greedy and greedy when others are fearful.” As sellers adjust to the continued slowdown, indeed now is the time to be buying.