According to a recent Douglas Elliman Real Estate Report the average sales price of a home in the borough of Manhattan is now at around $1.1 million dollars. This represents an increase of about 17% over last year. This statistic would have you believe that the housing market, especially the luxury one is doing well when the opposite is in fact true. To understand this one must delve a little deeper into the figures to understand that the market is now inflated in Manhattan.
The housing market saw a frenzy of newly constructed and available units under contract during the first quarter of 2016 which includes the months of January, February and March. This provided the first artificial boost to the Manhattan luxury real estate market. The second artificial boost was provided by contracts that were agreed upon and written as far back as 2015 and even 2014 that would begin in 2016. Take away the first boost which was new units being quickly snatched up, and the second boost which are old contracts maturing now and you will see that the sales market for new luxury developments is starting to level off.
Another figure which highlights that sales are tapering off is that the fact that newly constructed apartment listings fell by a total of 44% when compared to last year. This is despite the fact that a total of 5,500 new apartment units were constructed in Manhattan last year. Agents are now purposely keeping units of the market now, as they realize that the real estate market is now sluggish and bloated. The resale market in Manhattan however continues to remain strong and see growth. For more information on the cooling of the luxury housing market in New York check out this article on Crain’s New York Business.
Andrew Heiberger of Town Residential has the following to say about the inflated market right now. “Smart sellers have already made adjustments to their listing to reflect the real price of units on the market now.” The CEO goes on to say “that more developers and real estate agents will begin to follow suit and lower prices when they realize that the market has been inflated for some time now.”
Town Residential is a real estate firm that specializes in luxury housing in New York City. The firm has a total of four offices in Manhattan and teams that offer expertise on a neighborhood by neighborhood basis. Town Residential has recently been lauded as one of the top luxury real estate firms in New York City due to its outstanding services and approach.