Signs of life: Manhattan’s luxury resi market picking up pace

2017 contracts in over-$5M market jumped 29% year-over-year: report

New York /
Mar.March 16, 2017 05:35 PM

UPDATED, 6:18 p.m., March 16: There are early indications that Manhattan’s ailing luxury residential market is beginning to recover, with a jump in the number of contracts signed on the borough’s most expensive pads.

So far this year, 152 contracts on Manhattan condominiums and co-ops asking $5 million and above were signed, according to a new report from Stribling & Associates. The figure represents an almost 29 percent increase from 118 during the same time period of 2016. A total of 106 contracts on luxury condos were signed, according to the report — a 61 percent increase from 66 in the first two months of 2016. There were 29 contracts signed on co-ops priced at $5 million and above — a decline of 9 percent from the year before.

“In the last six months [of 2016], people were very concerned because the market seemed to wither — particularly on the luxury end,” said Stribling’s Kirk Henckels. “Because of Brexit and remarkably high anxiety over the presidential election, a lot of the luxury buyers went to ground — people were really panicky about it.”

Recent reports from other city brokerages also show a boost in the city’s luxury market. The number of contracts on properties priced $5 million above jumped 28 percent in January and 43 percent in February, the Wall Street Journal reported, citing Brown Harris Stevens analytics. Corcoran’s Kelly Kennedy Mack TRData LogoTINY told The Real Deal late last month that deals above $5 million were up 30 percent in the first month-and-a half of the year.  There were 108 contracts signed at $4 million and above in February, according to Olshan Realty — the second-best February since the brokerage started keeping track in 2006, and a 42 percent increase on contracts signed in February 2016.

However, Henckels said while there is a “building momentum” there were still many segments of the Manhattan residential market that lost 10 to 15 percent in prices just prior the election. “I do think some of that has been recovered, but I don’t know how much yet,” he said.

For its report, Stribling analyzed closed sales of Manhattan condos and co-ops priced at $5 million and above in 2014, 2015 and 2016 — as well as contracts signed between Jan. 1 through March 6 this year.

In total, the report found 1,013 luxury co-ops and condos sold in the city in 2016. For the first time ever, more than half of all luxury units closed — and over 62 percent of the dollar volume — were new development.

There were 572 new development sales in the over-$5 million market in 2016 — a jump of nearly 54 percent year-over-year, and an increase of more than 140 percent from 2014. Luxury condo resales were flat in 2016, increasing just 7 percent year-over-year to 293 closed sales.

Henckels said buyers choose new development for its ease – “consumer preferences [like] style, location and convenience.”

Closings of new development units priced between $10 million and $20 million saw the steepest increase. Sales in that particular price bracket jumped 122 percent year-over-year and more than 130 percent from 2014. However, Henckels cautioned the figure was inflated by closings at developments like Macklowe Properties and CIM Group’s 432 Park Avenue and Extell Development‘s One57. Last year — for the first time ever — there were more closings on Downtown luxury than uptown units.

Last week, there were 37 signed contracts in the over-$4 million market, according to Olshan. But the average property was discounted 14 percent from its original asking price before it went into contract, and the average days on market was 421.

These figures may be encouraging, but there have still been significant price reductions on the city’s most expensive properties in recent weeks.  In some cases, sponsors are offering concessions to buyers and higher commission splits to brokers in order to move product.

But Henckels believes there’s reason to be optimistic. “Let’s see how the spring develops,” he said. “We’re definitely on an up-trend — we’ll see how much strength there is in it.”


Related Articles

arrow_forward_ios
Here are the week’s top luxury sales

Here are the week’s top luxury sales

Here are the week’s top luxury sales
Clockwise from left: John D. Rockefeller, Izzy Englander, Steven Mnuchin, David Koch, Jacqueline Bouvier, and William Zeckendorf (Credit: Getty Images and StreetEasy)

For 15 years, David Koch lived at the world’s “richest building”

For 15 years, David Koch lived at the world’s “richest building”
Here are the week’s top luxury sales

Here are the week’s top luxury sales

Here are the week’s top luxury sales
48 Willow Place and 568 First Street in Brooklyn (Google Maps, Unsplash)

Brooklyn sees $49M in luxury contracts signed during holiday week

Brooklyn sees $49M in luxury contracts signed during holiday week
Second monthly decline in contract activity signals looming decline in U.S. home sales (iStock)

Pending home sales fall again as prices continue to rise

Pending home sales fall again as prices continue to rise
111 Waverly Place and 781 Fifth Avenue (Photos via MAD Nyc; StreetEasy)

Manhattan luxury deals surpass 10-year average over Thanksgiving week

Manhattan luxury deals surpass 10-year average over Thanksgiving week
Former J. Crew CEO Mickey Drexler and 760 N Walnut Ave, Ketchum (Getty; Realtor)

Former J. Crew CEO Mickey Drexler sells Idaho estate

Former J. Crew CEO Mickey Drexler sells Idaho estate
Singapore (iStock)

Singapore luxury market rebounds despite fewer foreign buyers

Singapore luxury market rebounds despite fewer foreign buyers
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...