Mixed signals in the Manhattan real estate market
Based on the latest reports from the major real estate brokerage firms in Manhattan, the real estate market in Manhattan is sending mixed signals. This might be an indication that the property market has reached its top and now going into a stabilization phase.
From a positive side, the Manhattan housing market built momentum in the first quarter of 2017 as the overall number of resale transactions, including both co-ops and condos, increased 7.7 percent year-over-year. Another positive element is that the average sale price, including both new and resale condos and co-ops, rose 2.6 percent to $2.1 million.
However, there are some negative factors in the Manhattan real estate market at the moment. While the average sale price did increase slightly, the median sale price, dropped 3.3% over the last 12 months. Also, it takes longer to sell units in Manhattan. Homes spent an average of 90 days on the market, up from 78 days recorded the same time last year.
While the market overall is sending mixed signals, it is important to look at the condo market in particular as condos are the type of apartments that foreigners will typically purchase. Condos have the advantage of being less restrictive around the sale and renting out of the units. This is a major advantage for foreigners who often do not have the necessary credit scores and documentation to buy in a coop building and also need the flexibility to rent out their unit.
This condo sub market seems to be neutral to slightly positive. Most brokerage firms indicate that the average sale price for condos increased approximately 4%.The median price for condos remained flat over the last 12 months.
Lastly, there is good and bad news for the new development projects in Manhattan. Both average and median prices recording year-over-year increases. The average price rose 23 percent to $4.8 million and the median price increased 4.9 percent to $2.8 million. However, the sales of new development projects dropped more than 25% from last year. Furthermore, units in new development projects spent an average of 241 days on the market — nearly twice as long as last year.
The outlook for the rest of the year is unclear, but sales are unlikely to surge over 2016 — especially if interest rates continue to rise.
Source: www.eastwestproperty.com Q1 reports of Corcoran and Elliman