The first quarter of 2018 was a good time to buy a condominium or co-op in Lower Manhattan, and a grim moment to be selling one. This is the consensus view of a slew of market research reports that were issued on Monday by leading real estate firms.
Analyses by the Corcoran Group, Stripling, and Douglas Elliman all point to a softening market for owner-occupied apartments throughout Manhattan, which officially puts the recently white-hot market into a correction.
But each report also makes the point that units in Battery Park City and the Financial District (which all three papers treat as a single community) have suffered more than those in any other neighborhood, with some indicators showing signs of distress last seen in the wake of the 2008 financial crisis.
The Corcoran Report documents that 100 sales closed in Lower Manhattan during the first quarter of 2018, a drop of 49 percent from the same period one year ago, while inventory has grown by 12 percent, to 404 available apartments. Given the slackening demand and sluggish current pace of sales, this amounts nearly to an eight-month supply. The apartments that did sell spent an average of 109 days on the market, and commanded a median price of $1.206 million, a drop of 15 percent. The average price per square foot fell by 13 percent, to $1,444.
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The Stribling Manhattan Market Report notes that in Lower Manhattan, median condominium prices declined by 20 percent from one year ago, while the average price fell 19 percent to $1,48 million. At the same time, the average price per square foot contracted by 12 percent to $1,373. The average price for condos dropped by 19 percent, to $1.478 million.
The Stribling analysis also notes that the combined area of Battery Park City and the Financial District was Manhattan’s slowest moving market in the first quarter of 2018, with only 14 percent of properties that sold entering contract within the first 29 days, while 16 percent took more than 180 days.
Overall, these metrics are among the most precipitous retracements seen in Manhattan real estate since the Financial Crisis that began a decade ago. Analysts at all three firms attribute the declines to a convergence of a new federal tax law that treats homeowners less favorably than in previous years, recent volatility in the stock market, and a falloff in new development in Lower Manhattan.