Manhattan Apartment Prices Collapse Most In Four Years
When Douglas Eilliman released their 3Q 2016 recap of Manhattan real estate sales, it basically showed that pricing held up during the quarter as sellers refused to lower their asks but the number of closings collapsed as buyers started to back away from a market that was starting to look bubbly. Here was our conclusion at the end of 3Q:
In conclusion, the lesson seems to be that the marginal New York City buyer has been priced out of the market (volume down 20%) while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels. Meanwhile, the luxury market is the only segment that seems to be holding up which only serves to prove that Chinese billionaires still have cash they would like to hide in the U.S.
Well, it seems as though sellers took note and decided to slash asking prices in 4Q. With median prices dropping 6.3% year-ove-year, 4Q 2016 marked the biggest quarterly decline in Manhattan real estate prices in 4 years, according to a note from Bloomberg.
After being forced to slash his asking price twice in two months on a property in Chelsea, Rex Gonsalves notes that "This isn’t a market where you go into a bidding war."
Rex Gonsalves, a broker with Halstead Property, thought $715,000 was a fair price for a one-bedroom co-op apartment in Chelsea with an outdoor patio. But after one month on the market, the best offers that came in were about 30 percent lower, he said.
The sellers agreed to cut the price twice in two months, bringing it down to $649,000. That attracted two offers -- one below the asking price and one above it, Gonsalves said. The 16th Street apartment sold in December for the higher price, $659,000.
“This isn’t a market where you go into a bidding war,” he said. “When we got this offer over ask, the sellers said, ‘This is great.’ It really helps to have savvy sellers, who understand the market.”