The Real Deal New York

Residential market report

From sliding home sales to Park Slope’s new bragging rights, a look at the biggest trends
By Meenal Vamburkar | June 01, 2018 10:00AM

Home sales value and volume tumble

New York’s residential market is still grappling with a hangover as the city saw year-over-year declines in total sales for the third consecutive quarter. Total transaction value citywide dipped 16 percent, to $10.3 billion, in 2018’s first quarter, according to the Real Estate Board of New York’s Residential Sales Report. That marks the largest annual drop since the third quarter of 2009. Home sales volume also shrank, by 10 percent, to 10,869 deals across the city. REBNY President John Banks attributed the declines to “a slowdown in sales activity at the high end of the Manhattan market.” Sales of homes for $3 million or more in Manhattan dropped by 30 percent. That decrease came as price cuts on luxury condos persist. Twenty-four luxury properties went into contract in Manhattan the week of May 7. On average, the prices were for 11 percent less than the amount sellers initially sought, according to Olshan Realty. “The increasing negotiability is the single biggest factor in motivating buyers off the sidelines,” according to Olshan’s market report. One silver lining was Manhattan apartment resale prices, which hit a new high in 2018’s first quarter. Apartment resale prices in the borough averaged a record $1.71 million, as sales over $5 million rose 25 percent from a year ago, per Brown Harris Stevens.

Co-op boards beef up closing credits

A growing number of co-op boards are giving buyers closing credits to help disguise falling prices, according to real estate attorneys. The sale price of a co-op at 425 East 58th, for example, listed for $3 million last year, but the buyer received a credit of $150,000 at closing. Essentially, the buyer and seller cut a deal to keep the publicly recorded price in line with comparable units in the building. Like other concessions, the trick tends to spike when more units are on the market, said Jonathan Miller of appraisal firm Miller Samuel. That’s in part because many co-op boards are unwilling to accept a sale below a certain price threshold, said Douglas Elliman’s Michael Graves. One common euphemism for the practice is “decorating allowance.” However, some industry players warn that these hidden concessions diminish price transparency and distort what the market really looks like. The buyer, meanwhile, is still on the hook for paying taxes on the higher, listed price. “It artificially is making consumers believe that housing prices are higher than the market actually indicates,” said real estate attorney Adam Leitman Bailey.

15 CPW tops best-performing condos

New York’s leading condo project isn’t a glossy new development — it’s two decade-old limestone towers. The average price per square foot of units that sold at Zeckendorf Development’s 15 Central Park West within the past year was $6,045, according to the most recent CityRealty 100 report. And the towers’ 6.8 percent compound annual growth rate from 2007 to 2017 far outpaced other buildings with 10-plus years of sales. “It’s surprising, but I guess it’s just a testament to how attractive that building continues to be to investors,” said Gabby Warshawer, research director at CityRealty. “The appreciation is much more than other buildings.” Macklowe Properties and CIM Group’s 432 Park Avenue came in second, with an average price per square foot of $5,542. Trump International and One57 also made the list. Last year, the Zucker Organization’s 30 East 85th Street took the No. 1 spot with a compound annual growth rate of 5.6 percent over a 10-year period.

Park Slope joins NYC’s 10 priciest nabes

As Brooklyn plays catch-up with Manhattan, Park Slope landed among the city’s 10 priciest neighborhoods for the first time. The area’s $1.41 million median sale price in the first quarter was higher than 19 of the 25 Manhattan neighborhoods tracked in StreetEasy’s quarterly market report. Park Slope is “a very stable market that has experienced a lot of upside over the years,” said Ideal Properties Group’s Aleksandra Scepanovic, who pointed to the area’s central location and generous supply of space. Carroll Gardens, Dumbo and Greenpoint also ranked in the top 10 priciest neighborhoods in the five boroughs. “Sale prices in a third of Brooklyn neighborhoods hit record highs, which signals that this is really a borough-wide trend,” said Grant Long, StreetEasy’s senior economist. But Manhattan’s $1,400 median price per square foot remains well above the other boroughs, according to the report. The median price per foot in Brooklyn and Queens was $700 and $500, respectively.