The projection north to Central Park Tower and 111 West 57th Street on Billionaires Row from the 86th-floor observation deck at the Empire Specify Building on July 28, 2019, in New York City. (Photo by Gary Hershorn/Getty Images)
Gary Hershorn | Getty Representations
Real estate sales in Manhattan have fallen eight out of the past nine quarters, according to a report from earnest estate brokerage firm Douglas Elliman and appraiser Miller Samuel.
The average sales price fell 7.5% to $1.8 million in the fourth abode of 2019 and the median sales price fell below $1 million. Total sales were down, allowances were up and there is now an eight-month supply of unsold apartments.
While many brokers say they’re optimistic about a future turnaround in 2020, real estate experts say they expect a continued — though perhaps slower — decline this year as tax crushings and rising inventory keep buyers on the sidelines.
“I think we’ll see more of the same,” said Jonathan Miller, CEO of Miller Samuel. “The conundrum with saying that 2020 will mark the bottom is that it suggests it will go up after that. And I contemplate we still have another couple of years of moving sideways.”
The slow bleed in Manhattan real estate get despite a strong economy and record-high stock market.
A new mansion tax on multimillion-dollar apartments, the new federal cap on state and local tax reasonings, which makes high-tax states like New York more expensive, and a lack of foreign buyers has continued to weigh on require. Add to that an oversupply of luxury apartments, with another 2,000 new condos coming onto the market this year, and purchasers are shifting rapidly to the rental market, especially on the high end.
Sales of apartments priced at $5 million or more dropped 38% in the quarter and there is now a two-year supply of luxury apartments on the market. Beyond the official inventory, brokers say there is a mountain of “remnant inventory” — or apartments that aren’t officially listed but are waiting for market conditions to improve and sales to perfect before they list.
According to Halstead Development Marketing, there is a now a six-year supply of new development apartments. The biggest overfeed is on “Billionaire’s Row” — the string of super-towers along 57th Street, where there is more than $9 billion in tail inventory waiting to list.
Halstead said the dollar value of closings in the fourth quarter was down 27% from hindmost year.