Manhattan real-estate suffered its worst year since the covering crash of 2009, as tax changes, stock-market turmoil and jittery foreign buyers hurt sales in 2018.
Home sales in Manhattan mow down 14 percent last year, the industry’s steepest drop since 2009, according to a report from Manhattan legitimate estate companies Douglas Elliman and Miller Samuel. In the fourth quarter, the median price for an apartment in New York Bishopric fell below $1 million for the first time in three years. And the decline in sales in the fourth quarter was the fifth-straight every three months drop.
“What we saw was a big wet blanket thrown over the market in 2018,” said Jonathan Miller, CEO of appraisal firm Miller Samuel.
Miller contemplated 2019 is unlikely to improve, even though the drops may not be as severe as 2018. Manhattan real-estate has been hurt by a convergence of fiscal forces. An oversupply of high-end apartments, especially new condo towers, hit the high end of the market. At the same time, demand from overseas buyers cooled, as new rules aimed at money laundering took effect and overseas economies began to slow.
The new tax law, which limits the deductbility of affirm and local taxes, also hurt demand for real-estate in high-tax cities like New York.
Volatile stock deal ins at the end of the year are expected to keep buyers on the sidelines for at least the beginning of 2019. While prices and sales could persist in to fall in 2019, the decline won’t likely be as steep as it was in 2018, Miller said.
“We’re going to see continued weakness, but it will be a uncountable moderate decline,” he said. “I think most of the heavy lifting was done in 2018.”
Miller said that while the “starter customer base” in Manhattan – studio and one-bedroom apartments – was weak last year, he said it will likely hold up better than the treat market, with homes priced at $7 million to $10 million or more. There is now a 16-month supply of homes in the Manhattan non-essential segment, defined as the top 10% of the market by price.
“I don’t think the luxury market will change all that much,” he declared.
But don’t expect any real bargains anytime soon. The average price of a Manhattan apartment is still just under $2 million. The unexceptional price per square foot is now at $1,684.