New York City’s housing market entered Year Two of a correction in 2018 — a year that saw heavy discounts and increased competition among brokers anxious to get deals done.
During the fourth quarter, the median sales price in Manhattan dipped below for the first time appraisal firm Miller Samuel. New development sales — which account for nearly 11 percent of deals in Manhattan — fell a whopping 31.5 percent during the fourth quarter.
Squeezed by a slower market and tech-savvy startups nipping at their heels, the city’s top firms fought to retain market share in 2018. Earlier, the Corcoran Group sold $6.29 appraisal firm Miller Samuel.
New development sales — which account for nearly 11 percent of deals in Manhattan — fell a whopping 31.5 percent during the fourth quarter. Squeezed by a slower market and tech-savvy startups nipping at their heels, the city’s top firms fought to retain market share in 2018. Earlier, the Corcoran Group sold $6.29 billion worth of Manhattan real estate in 2017, according to The Real Deal’s most recent analysis, while Douglas Elliman brokered $5.23 billion. Stribling & Associates and Compass followed — albeit far behind — with $1.58 billion and $1.37 billion in sales, respectively.Amid a shifting market, many firms shook up their management teams.
The owners of Brown Harris Stevens promoted Co-President Bess Freedman to be the firm’s first chief executive. Meanwhile, Elliman CEO Dottie Herman sold her 29 percent stake in the firm for $40 million — a move long rumored to be in the works.
Below the C-suite, newer players continued to vie for top talent, with Vickey Barron leaving Corcoran for Compass and Erin Boisson Aries exiting Brown Harris Stevens to join Christie’s newly launched brokerage division. In one of the year’s biggest stories, Compass sewed up a $400 million funding round from SoftBank and Qatar Investment Authority in September, valuing the firm at $4.4 billion.
On the other side of the spectrum, Town Residential folded in April after teetering on the brink of insolvency, setting off a mad dash among top firms to hire its former agents. For all the talk of a slower market, several of the city’s marquee new developments began closings in 2018, including 220 Central Park South, home of a penthouse asking $250 million. Hedge funder Ken Griffin closed on the massive spread for a record-shattering $238 million in January 2019, a spokesperson for Griffin confirmed. As of mid-October, when closings began, developer Vornado Realty Trust said it expected to pocket $1 billion in profits from the tower, which was 83 percent sold at that time. Also in 2018, Zeckendorf Development began closings at 520 Park Avenue, where vacuum mogul James Dyson scooped up a $74 million pad.
Despite those eye-popping deals, discounts dominated in 2018, which saw an average price cut of 6.2 percent during the fourth quarter, according to Miller Samuel. Thanks to discounts, buyers and sellers at the top of the market, too, finally found common ground. Banker Ken Moelis, for example, snagged a $62 million spread at 520 Park Avenue once asking $73 million. And at Extell’s One57, billionaire Lawrence Stroll took a $1.6 million loss on his $54 million pad.
Although it wasn’t an easy year for luxury condos, developers including HFZ Capital Group and Macklowe Properties forged ahead with massive projects. The state attorney general accepted HFZ’s plans for the Eleventh, a $2 billion condominium where prices for the 236 units will range from $4 million to $8 million. It also approved Macklowe’s 1 Wall Street, which is shooting for total sales of $1.69 billion.By comparison, the priciest condo filing in Brooklyn was 11 Hoyt Street, Tishman Speyer’s 481-unit project, which is aiming for a $837.9 million sellout.
In 2018, United Development & Construction Group planned Queens’ first condo project with a $1 billion sellout: Skyline Tower, an 802- unit tower in Long Island City. With Amazon’s disclosure that it would split its HQ2 between LIC and Crystal City, Va., the waterfront development hub is just getting started, industry watchers say.