Believe it or not, Manhattan residential sales prices are flat.
That’s the takeaway from Douglas Elliman’s latest quarterly report, which found that the median sales price in Manhattan was $970,000 during the first quarter of 2015, compared with $980,000 last quarter. The average sales price, the report found, dropped 2.3 percent to $1.73 million during the quarter.
“The market is downshifting to a more sustainable level of activity,” said Jonathan Miller, president of real estate appraisal firm Miller Samuel and the author of the Elliman report. The report also found a slight uptick in inventory and a decline in the number of closed sales. “Prices are high but stable,” Miller said.
Despite stable prices in the market as a whole, the luxury segment saw its median sales price drop 10.6 percent to $5.1 million. There were also nearly 20 percent fewer luxury sales compared to last year, with 266 closed sales in the first quarter.
The number of new development sales also dropped 16.8 percent to 272 during the first quarter, according to the report. And the median sales price for new development units fell by 6.1 percent to $1.6 million. The average new development sales price grew 6.6 percent to $3 million.
According to Miller, the price changes can be explained by recent inventory gains. During the first quarter, there were 5,243 units on the market, a 5.5 percent increase from the same period last year, he said.
As for sales volume, the number of closed sales – 2,661 – dropped by 19.5 percent, the third consecutive quarter that saw a double-digit decline. But Miller said sales volume shot up in 2013 and 2014 to record, or near-record levels, in response to pent-up demand following the financial crisis.
“I contend that surplus demand has largely been satiated or absorbed,” Miller said. “The prior level was not sustainable…. So even though sales fell sharply, they are still high.”
Miller said the comparatively low level of resale inventory means prices are likely to climb. During the first quarter, resale inventory overall rose 0.8 percent, while new development inventory rose 22.1 percent. “It keeps the pressure on prices for resales,” he said. “We’re either stuck in a high plateau of we’re poised for more price growth,” he said.
Elliman’s rivals also published their own takes on the market Wednesday.
In its report, Corcoran Group said the first quarter saw 3,401 signed contracts in the first quarter of 2015, up 5 percent year-over-year from 3,248. Town Residential noted a 23.5 percent increase in contracts signed on units priced at $10 million and up.
Startup brokerage Compass tallied $4.5 billion in total sales during the 2015 first quarter, down 16.7 percent year-over-year.
In a separate analysis published on Tuesday, the Wall Street Journal found that resale prices are rising. The median price of a resale condo in the first quarter was $1.4 million, up 9.8 percent. New condo prices dropped 22.8 percent to $1.4 million.