New York City’s luxury market may be softening, but properties under $3 million are “raging,” according to Douglas Elliman’s John Gomes during an interview on CNBC.
“Anything under $2 million? Forget about it,” Gomes said.
As for the luxury market, he said there’s been too much supply for too long. But much like a swinging pendulum, the market that’s going down now will eventually come back up.
“I think the best time to buy is when the market is going down,” Gomes advised, predicting the second half of 2016 will pick up.
Overall, the number of contracts signed on luxury pads costing $4 million and up dropped 15 percent during the second quarter, according to Olshan Realty. Meanwhile, the marketing time for luxury properties stretched to 311 days in late June.
But Manhattan’s luxury prices are still rising, thanks to high-end new condominium closings. The median sale price rose 10 percent during the second quarter to $6.6 million, according to real estate appraisal firm Miller Samuel. The median sale price overall jumped 13.1 percent to a record $1.1 million during the same time.
Gomes said post-Brexit, some investors have paused.
“I had a deal brewing on a $20 million apartment,” he said. “The day after Brexit, the buyer said, ‘You know, with the recent news I’m going to reconsider my offer. It’s going to be lower.’”
Although the city’s luxury market is softening, brokers and economists have said Brexit could be a boon for high-end real estate, as investors seek opportunity outside the U.K. and London.