The Real Deal New York

Resale market’s day in the sun? Listings spike 25 percent in Q2: Elliman

Manhattan median sale price hits record $1.1M

July 01, 2016 07:00AM
By E.B. Solomont

Manhattan contracts signed, by quarter (Credit: Corcoran Group)

Manhattan contracts signed, by quarter (Credit: Corcoran Group)

Could it finally be the resale market’s turn in the sun?

Amid the softening high-end condo market, Manhattan’s resale inventory spiked 25 percent and prices stabilized during the second quarter, according to the latest quarterly sales report from Douglas Elliman.

In new development, the narrative of the last three quarters “has been ‘record, record, record’ because there was a huge flow of contract-to-closings,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel and author of the Elliman report. “Yet that represents the market from 12 to 18 months ago, so record prices represent the market of more than a year ago, skewed to the high-end.”

Meanwhile, the resale market “is rising rapidly,” said Miller, who for the first time analyzed the resale and new development markets separately in his report.

Resale inventory grew 25 percent to 5,362 during the quarter, the biggest year-over-year increase since 2009’s first quarter, according to Miller. Meanwhile, the median sale price was flat at $945,000.

Overall, Manhattan’s median sale price jumped 13.1 percent to a record $1.1 million during the second quarter, the report found. The average sale price also increased by 13.1 percent to $2.03 million and in the luxury market – defined in the Elliman report as the top 10 percent of sales – the median sale price was a record $6.6 million, a 10 percent year-over-year jump.

Overall, second-quarter sales increased 2.3 percent to 2,736 while inventory rose 11 percent to 6,352. Luxury inventory, however, dropped 20.7 percent to 1,391.

Echoing recent quarters, there were a flurry of new development closings.

Closings more than doubled to 505 during the quarter, compared to 212 a year ago. And the average new development sale price rose 4.9 percent to a record $4.38 million – a trend that Miller said reflects contracts signed before the recent softening. (The second-quarter median sale price in new developments was $2.7 million, up 44.1 percent from $1.9 million.)

The new development segment encroached on Manhattan’s resale business, capturing 18.5 percent of market share compared to 7.9 percent during 2015’s second quarter.

In a separate report, also published today, the Corcoran Group said the number of contracts signed during the second quarter jumped 12 percent from the first quarter of the year. But the volume of contracts dropped 20 percent compared to last year at this time.

In its own report, Brown Harris Stevens said 75 percent of the quarter’s 2,115 closings were resales.

Despite the hype surrounding new development, “a vast majority of the Manhattan housing stock are resale apartments,” said BHS’ president Hall Willkie. “This quarter there were 1600 resale closings, and, of those sales, only smaller apartments experienced price increases.”

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