The 'frenzy' for Manhattan real estate is over
Amid a glut of properties, buyers in 2016 had more leeway to negotiate lower prices for units they wanted, or find better bargains elsewhere.
The fourth quarter "showed a continued easing of conditions, capping off a year without the frenzy seen in the prior several," according to a report from the brokerage Douglas Elliman Real Estate.
That frenzy involved home prices rising at a faster pace than wage growth and inflation, not just in Manhattan, but nationally.
Additionally, a separate report from Olshan Realty said in late December that contract signings in 2016 fell "below the golden years of new condo development: 2013-2015."
Sellers in Manhattan lowered prices to be more in line with what buyers were offering. The cost of previously owned co-ops and condominiums dropped by 6.3% to $900,000 year-over-year in Q4, according to Douglas Elliman. Overall, the median sales price of housing fell by 9% to $1,050,000.
Some sellers took units off the market altogether, as re-sale inventory fell "sharply" in the fourth quarter, according to the report.
As the market cooled, buyers who waited to close on deals in the fourth quarter may have snagged better prices than those who closed a year earlier; the listing discount on all condo and co-op sales was 5.5%, up year-on-year from 3%.
Last year, the share of bidding wars for the hottest apartments fell by more than half to a four-year low, adding to evidence that the market slowed down. Also, it took longer for houses to sell; in the fourth quarter, the average number of days that properties were listed increased by about 15% to 94 days.