Over 25 percent of Manhattan’s newly built luxury condos remain unsold, and prices may have finally begun to adjust to that glut of units. According to a new StreetEasy report, luxury home prices, which constitute 20 percent of Manhattan real estate, dropped to their lowest levels since 2013 in the last quarter of 2019, $3,816,835, a 6.1 percent decrease from the prior year.
But, even as prices dropped, adjusting to a widely known surplus, more units continue to be added to the market: StreetEasy’s report shows that luxury inventory increased 12.2 percent over the last year, that is more than 4,000 homes over the $3.816 million threshold.
Manhattan’s overall home prices have been lowering for a while now, and this quarter was not the exception, as prices dropped 3.7 percent, to $1,086,217, based on StreetEasy’s price index, which tracks changes in resale condo, co-op, and townhouse prices. Homes in the borough also lingered on the market for 96 days, the report says, 10 more than last year.
“With so much new construction saturating the Manhattan real estate market, we were bound to see prices start to sink at record paces,” StreetEasy economist Nancy Wu said in a statement. “This is happening across all price points and boroughs, as prospective buyers wait out the market from the comfort of their rentals.”
Similarly to the previous quarter, the Brooklyn and Queens markets didn’t see significant change. Brooklyn’s price index was $696,016 by the end of the quarter (it was $696,076 in the previous one), while Queens’s was $509,902 ($507,224 in the previous quarter). But, in Queens, inventory did increase 1.2 percent, to 4,308 homes compared to last year.
Now, based on all this, what should buyers expect during the rest of the year? According to StreetEasy, they’re in the “driver’s seat” with a ton of leverage for negotiating and plenty of units to choose from.
“Market dynamics in 2020 will continue to favor the buyer across all price tiers, and many sellers will have to face the fact that if they want to sell, it may very well be for less than their initial asking price,” Wu said.