NYC MARKET RESULTS: NEGLECT OF THE MIDDLE RICH?

urban-compassPosted by Leonard Steinberg, President of URBAN COMPASS, on June 30th, 2014

Is the New York real estate market starting to soften? Some reports say so, but it probably has everything to do with the INVENTORY issue. ¬†Signed contracts may have declined in recent quarters compared to the prior year but it’s not because of declining demand…..what we are seeing in Manhattan may be the neglect of the MIDDLE RICH: they are moving to Brooklyn where more options exist in their budget. There too demand out-strips supply.

The volume of signed contracts in the first half¬†of 2014 on properties priced above $4 million is almost identical to last year’s figures. Here are some URBAN COMPASS observations:

Contracts signed:
-20% drop in signed contracts this quarter compared to a year ago. 14% drop in contracts this first half of the year compared to the first half of the year in 2013.
-Upper Manhattan was the ONLY segment of the market that had an increase in contracts in this second quarter, and in this first half of the year – up by almost 20%. This can be attributed to new inventory product like the Adelaide.

Inventory:
-Inventory continues to decline in Manhattan although it is now happening at a slower pace. In the first quarter of 2014, inventory dropped 12% since the prior year. This quarter, inventory has declined by 7% compared to the prior year.
-Downtown had the smallest dip in inventory, by 5% in both Q1 and Q2 compared to the prior year. UES and Midtown had the largest dips in inventory, both at a 14% decline in the first half of the year compared to the prior year.

Delisted listings:
-Fewer and fewer listings are being delisted. This quarter, there was a 14% decline in the number of listings being delisted, and a 16% decline for the first half of the year, compared to the prior quarter.
-The Midtown and UWS segments of the market had the largest decreases in delisted listings this quarter, over 30%, compared to a year ago, indicating that demand is quite high in these areas.

Time on Market:
-Properties are getting snatched up 20% quicker in this first half of the year compared to the same period last year.
-Midtown and Upper Manhattan properties, in particular, are getting snatched up the quickest.

The first half of 2014 has also produced a renewed strength in pricing with two properties selling for prices normally associated only with condominiums: 740 Park Avenue and the 960 Fifth Avenue Bronfman penthouse sold for $ 70 million each, both new records. The penthouse sale for $ 26.5million at 383 West Broadway set a new price per square foot record for a Downtown co-op.