The year in luxury: Pads take 433 days to sell

Contracts $4M-plus totaled $9.1B, up 2% from 2016

New York /
Dec.December 29, 2017 08:30 AM

Properties asking $4 million or more took 433 days to sell

Good news for anyone who listed a $4 million apartment in 2015: You probably found a buyer — finally — in 2017.

Price cuts and protracted marketing times defined this year’s luxury market, according to Olshan Realty’s year-end market report, which found that properties asking $4 million or more took 433 days to sell. That compares to just 318 days in 2016. And this year’s deals also came with an average discount of 8 percent.

“Sellers in general, as long as I’ve been in the business, have had a hard time coming to reality when it comes to pricing their own apartment or their townhouse,” said Donna Olshan, author of the report.

Overall, the report showed modest gains in contract volume in Manhattan’s luxury market. Barring any 11th-hour deals, buyers in 2017 inked 1,172 contracts on luxury properties, up 6.3 percent from last year’s 1,102. (Contracts were still 14.6 percent lower than 2013, when buyers scooped up 1,372 homes over $4 million.)

Jonathan Miller of Miller Samuel chalked up the luxury market’s improvement to aspirational listings that were pulled off the market or discounted. “Sellers finally became aware of existing market conditions,” he said. “The paradox here is by applying sharp cuts to their asking prices, they helped push aggregate market results higher.”

In all, buyers inked deals valued at $9.1 billion in 2017 — up from last year’s $8.9 billion but still far below the high-water mark in 2014, when buyers scooped up $11.5 billion worth of luxury real estate. The average discount in 2017 was 8 percent.

See more 2017 year end reviews here

“These price reductions often veiled the fact that many properties were simply overpriced,” said Compass president Leonard Steinberg.

According to Olshan’s report, there were also fewer deals struck above $10 million. In 2017, the report found 200 contracts signed above $10 million, down 7 percent compared to 2016 and down 26 percent from 270 in 2014.

But Steinberg said the high-end market saw “renewed vigor” during the last quarter of the year. “The investor buyer in new developments is slowly returning as equity markets appear richly valued and the dollar has weakened,” he said. “Several contracts were signed on trophy properties, indicating renewed confidence amongst the ultra-wealthy.”

In fact, Olshan’s report found the condominium market dominated 2017’s contracts over $4 million — accounting for 880 of the year’s 1,172 deals. (Only 100 townhouses went into contract, down 11 percent from 2016.) Of the condo deals, 440 were sponsor units, compared to 435 that went into contract in 2016.

Still, those numbers don’t come close to the “golden years” of new development between 2013 and 2015, Olshan wrote. New development contracts during those years totaled 475 (2013), 486 (2014) and 456 (2015).

Of course, new development contracts don’t necessarily reflect the market reality, since it can take years to close. According to CityRealty’s review of 2017’s sales, new development condos were actually a weak link in the residential market. New development sales were projected to hit $8.1 billion by the end of the year — a 13 percent drop compared with 2016’s $9.3 billion in sales.


Related Articles

arrow_forward_ios
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”
From left: Michael Dell with 25 Water Street, Alex Sapir with 261 Madison Avenue and Marc Holiday with One Madison Avenue (Getty, Edge Funds, Sapir Organization, SL Green)
Office properties (yes, office!) got Manhattan’s biggest December loans
Office properties (yes, office!) got Manhattan’s biggest December loans
Joe Tsai with 220 Central Park South, Vlad Doronin with 730 Fifth Avenue, Paul Allen with 4 East 66th Street, Michael Stern with 111 57th Street
Here are NYC’s 10 priciest homes of 2022
Here are NYC’s 10 priciest homes of 2022
Reed and Delphine Krakoff along with 54 East 64th Street (Getty, Google Maps)
Fashion bigwig sells townhouse for $36M after two price cuts
Fashion bigwig sells townhouse for $36M after two price cuts
Ian Bruce Eichner, 45 East 22nd Street
Eichner’s Madison Square Park saga enters final act
Eichner’s Madison Square Park saga enters final act
Piofrancesco Borghetti with 15 Central Park West (Getty)
Convicted cosmetics mogul relists 15 CPW pad with another price cut
Convicted cosmetics mogul relists 15 CPW pad with another price cut
188 Nelson Street and 483 13th Street
Zero deals signed for $4M homes in Brooklyn last week
Zero deals signed for $4M homes in Brooklyn last week
944 Fifth Avenue and Central Park Tower at 217 West 57th Street
Central Park Tower condo tops Manhattan luxury contracts
Central Park Tower condo tops Manhattan luxury contracts
arrow_forward_ios

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

Loading...