Supply and demand. It’s one of the first things we learn in business. Right now there are a lot of apartments available for purchase in Manhattan and less people buying.
Sales of previously owned condos and coops fell 20% in the third quarter as compared to the previous year in a report from Miller Samuel Inc and Douglass Elliman Real Estate. There were 5290 apartments on the market at the end of September, 53% more than the number available in 2013.
Sales of units less than $1 million have been in short supply and those that made it to market, sparked bidding wars. Consumers are also taking longer to make a decision. However previously own properties spent an average of 72 days on the market with an average price of 1.5 million, an increase from last year which was only 67 days with an average price of 1.48 million.
The median price of resales in the quarter reached 2.6% according to the report. That is a step down in a 3 year period which the annual price growth reached 18%.
Though new developments are partly to blame. Both the average and median prices for new developments have skyrocketed. The average price is $5.3 million while the median is $4 million according to Halstead. The luxury market this quarter had the highest number of apartments over $10 million sold since the financial crisis of 2008.
Though sellers remain optimistic. In a report by Compass, the median condo asking price reached 2.3 million. The median for condos that went into contract was 1.6 million about 18% less than the peak in 2014. Prices have been going up, so it’s normal for the market to take a pause, because it simply cannot go up forever.
However when priced correctly, units will move. Sellers have to curb there exuberance and know the market. They have to trust their agents in pricing because the demand is still there.