The Manhattan residential market has bounced back from the dark days of the recession. But 2018 was a choppy year, and key metrics suggest a wave of fresh challenges ahead.
A new report out today from Douglas Elliman tracks trends in the Manhattan residential market over the last decade. It found that annual sales of condos and co-ops saw the largest year over year decline since the financial crisis. It was the fourth sales decline in five years.
The report also paints a picture of a market slowdown across the board in Manhattan in 2018.
Though big sales at ultraluxury buildings like 520 Park Avenue, 432 Park and 220 Central Park South have dominated the headlines, Elliman’s new report found that price trend indicators all declined year-over-year in 2018, as the legacy contracts inked when the market was booming finally closed.
For co-ops and condos, these metrics were all down in 2018 over the prior year: average sale price ($1.97M; -3.6%), average price per square foot ($1,658; -6.6%), and number of sales (10,229; -14.2%), while inventory was up 11.8 percent from the same time last year. In 2009, the number of sales was 7,430 and listings inventory was at 6,851, according to Elliman. The average sales price a decade ago was $1.39 million.
A separate Elliman report released today focused on the smaller townhouse market points to more specific challenges ahead. Although the report found that townhouses “outperformed” the apartment market on sales and price trends, the picture is more complex.
“The growth of the large condominium has really taken a bite out of the traditional townhouse market,” Jed Garfield, CEO of townhouse-focused brokerage Leslie J. Garfield & Co told TRD recently.
Garfield pointed out that townhouse stock is much more limited than other parts of the market, because there are almost no new townhouses being built in Manhattan. Elliman’s new report shows townhouse inventory is down 7 percent from 2009.
By contrast, new developments have saturated the market in recent years, including larger condos that compete more directly with townhouses. Since 2009, the sale of condos with four or more bedrooms has jumped by over 90 percent. These new developments also woo buyers with amenities and concierge services.
However, Garfield remains hopeful that consumers will soon shy away from the high costs in new developments, like common charges, maintenance charges and taxes.
“As consumers get smarter I do that think there is going to be some kind of comeback in the townhouse market,” said Garfield.
The new analysis from Elliman shows the townhouse market bounced back from the financial crisis of 2009 more quickly that the co-op and condo market, with the median sales price for townhouses rising twice as fast.
Unlike in the condo and co-op market, the average sales price of a Manhattan townhouse is up 6.6 percent from the same time last year, at just over $7 million. However, the number of sales are also down 7.7 percent from the same time last year.