How much did high-end >$3mm came down yoy?

Sorry for the typo in the title. Trying to edit to fit 50 words.

Let's differentiate between "prices going down" and "list prices being cut."

The last numbers we have from Jon Miller, Elliman's 1Q report, don't show ANY softness in resales yet. I am definitely in the camp that the market overall has already peaked, and EVENTUALLY we will see that softness .... but with the long time lag we have on data coming in, and (IMHO) the sub-$2 million market staying hot, it's tough to pin down what that means for $3 million to $5 million.

The chops you are seeing are maybe resales coming away from (probably-never-attainable) attempt to be competitive with new developments -- so list prices are being cut -- but not necessarily a year-over-year softness for resales themselves.

Yet the market doesn't seem flat. If I had to spitball, I'd say down marginally on an apples-to-apples basis, maybe down 2% psf y-o-y?

But that's just a guess -- it's not my sweet spot.

The last closing I had in the $3-$5 million resale market was in January, and I was representing buyers, and we had found inventory so thin that we were just happy to find what we wanted where we wanted it.

Digs could tell us more. Noah, are you around?

ali r.
{downtown broker}

Thanks Ali. I agree that listing price cuts from marked up prices relative to previous sale may be more of what I am seeing than actual sales which are meaningfully lower. The rates continuing to go lower and staying lower may provide support for price increase for the non new development.

Here is an example. Listing price after cuts at 2012 sale. Granted, this apartment is not for every one.
http://streeteasy.com/sale/1227238

This article says prices coming down in all market segments:

http://www.nydailynews.com/life-style/nyc-real-estate-market-cooling-good-time-upgrade-article-1.2680450

You can also see plenty of resale price chops on apartments under $3m:
http://streeteasy.com/building/the-laurel
http://streeteasy.com/building/the-brompton
http://streeteasy.com/building/onyx-chelsea

More:
http://streeteasy.com/building/gramercy-starck
http://streeteasy.com/building/303-east-33-street-new_york
http://streeteasy.com/building/element-condominium

Ccl, Can you please post any apples to apples example? Thanks.

While asking price reductions can indicate market softness, they don't necessarily indicate "falling prices". As 300_mercer alludes to, you really need YOY apples to apples closed sales for that.

Please provide dem apples.

I was showing listings in luxury condo buildings with resale apartments priced under $3m that have had price chops. If you look at the links and scroll down all of the sale listings in those buildings I posted there are many with down arrows. Did you mean something else by apples? I was trying to show price cuts in listings under $3m.

Oh, sorry, reading 30yrs' comment now. I'd have to go back into the posted sale links for those buildings. The problem is things sitting on the market longer not selling because resellers trying to get too much money for them. Will look later.

Here's one: This 1276 sq ft 2BR sold for 2.5m in 2015, there is currently a 1275 sq ft 2 BR price chopped to 2.175m sitting on the market. There's also a 1318 sq ft 2 BR price chopped to 2.45m sitting on the market almost 4 months.
http://streeteasy.com/sale/1139626
http://streeteasy.com/sale/1213810
http://streeteasy.com/building/the-laurel/9e
There is a 2-4 floor difference, but still.

Here's another:
http://streeteasy.com/building/onyx-chelsea#tab_building_detail=2
Apt 3A sold in May 2016 for 1.637, almost 85k less than Apt 5A sold in Jul 2015 for 1.723. Same apt, just 2 floor difference. Also Apt 8B closed in July 2016 for 2.48, while apt 6B has been price chopped to 2.2, sitting on the market for a while.

Here's another:
http://streeteasy.com/building/onyx-chelsea#tab_building_detail=2
Apt 3A sold in May 2016 for 1.637, almost 85k less than Apt 5A sold in Jul 2015 for 1.723. Same apt, just 2 floor difference. Also Apt 8B closed in July 2016 for 2.48, while apt 6B has been price chopped to 2.2, sitting on the market for a while.

^^ignore duplicate on last one; site crashed on me.

^should say 8B closed in July 2015

CC, Thanks for the post.

Re Laurel, 7B vs 11b is has to say as they just cut the price for 7b. It shows market is flattish. However, 9E clearly shows market down.
http://streeteasy.com/sale/1139626
http://streeteasy.com/sale/1213810
http://streeteasy.com/building/the-laurel/9e

sorry typo: "is hard to say"

Great examples for Onyx which show down >5%. That is roughly my gut feel even though street easy condo index will be too slow to catch it as the sales data has to belong to the same unit.

Keithb, What is your thought on the above?

Well, if I can nitpick a little, those condo comps for the Laurel and the Onyx aren't in the $3 million to $5 million space. They're in the $1.5 mm to $2.5 million space, which I think is a completely different buyer. I bet everyone on this thread can agree that luxury 2/2s don't command the same dizzying prices that they did a year ago; but in my mind, the question asked originally is what's happening to 3/2s (or convert-3 / 2s).

ali r.

CCL3 you are getting caught up in trying to time the market which is a no no. Many buyers do this as if they can accurately predict the short term direction of prices. You can't. If your current financial and personal situation are conducive to purchasing then go ahead. Over the long term your apt will appreciate and you will have made the right move however short term is a wholly different story.

Front-porch, I was adding a point that some of this is going on in other market segments, not just in the segment originally raised.
SteveF, I agree to some extent, but since I want a long term purchase I'd rather hold out to be able to get something nicer in my price point. I'd be upset if I felt I was settling for something mediocre to stay in my price point, when I could get something better if I wait. Also, I am buying with a partner who keeps screaming "bubble" and that person has to be convinced to kick in half of the purchase price.

If i am reading correctly, 11B originally sold for a little more than $200K over what 7B sold for. So I'm not sure that 7B asking $5k less than what 11B sold for proves the market is down.

>CCL3 you are getting caught up in trying to time the market which is a no no.

So if you see a place you like, and it is relatively cheap to the past comps, don't you dare buy it, that would be like picking up the penny on the street which any economist could tell you is not actually there.

I found that it's "cheaper" to buy! Mortgage + maintenance (including RE tax) is going to be $600 cheaper per month compared to current rent!!

Bluesky,
Very hard in manhattan.
1. What percentage down are you assuming? Assume you are only counting interest payments , which is the right way rather than including principal payments.
2. Are you factoring in regular maintenance (typically $2k per year), insurance, repainting every 5-10years, and biggest of all periodic renovation (baths have a life of 20-30 years, KItchens probably 30, floors a bit longer).
3. My estimate for the last item is every 30 year, you have to gut reno the place. Some of this gut reno is improvement from your current starting point - say 30%. The rest should be amortized over 30 years. So 300 a sqft gut reno in current $ will be ~$210 in amortized expenses over 30 years. Say $7 per sq ft per year or $0.60 per sq ft per month additional cost you need to factor in. I am assuming investment returns cancel out inflation. You can plug in your own numbers. In accounting terms, it is depreciation.
5. My rough estimate of the above costs is 75cents per sqft per month for high-end apartment. For typical doorman rental, probably 50 cents due to lower construction quality. Naturally, this will vary depending on the current condition of the apartment you live in.
5. Normally property appreciation (if you believe in it) can make you much more than rent but that is separate discussion.

30, Good point. hard to tell the reason for price difference from just floor plans and pictures.

hi 300, i was using 30% downpayment, comparing to full mortgage (principal + interest)+ maintenance is less than rent, but didn't factor in the other things you mentioned (depreciation, gut renov, insurance...). Moving is THE WORST. It's one of the biggest mental suffering...

I am with you about moving. Looks like you have found a good place. Typically, principal portion is much more than the other costs you did not include. Other big benefit of home ownership people ignore in financial calculation is ability to customize your apartment to your liking. In my mind (each person is different), there is a 10% premium for the ability to customize and not having to move and pay related expenses. Also, buying an apartment offers partial inflation protection. Partial as maintenance and taxes go up.

Coop seems like huge bargain to me compared to condos. Like half price though not as luxurious. Coops also require 1 year post close liquidity which is also quite limiting. However, for all those reasons that make coops cheap, I would rather pay a lower price at the expense of being restricted. CCL, why did you sell your apt in 2014 instead of waiting until you found another to buy before selling ?

>Coops also require 1 year post close liquidity which is also quite limiting.

Really? You want to live in a building as an owner where other residents don't have at least this amount of minimum cash on hand?

I mean it limits some buyers so if you're a coop owner trying to sell, it's not so easy to sell. but ya I guess it's good.

I sold in 2014 because I got married and needed more living space. I also wanted to lock in my price appreciation at a market high. Couldn't find any larger places we wanted to buy in our price range so we decided to rent in the interim.

bluesky i agree with you on co-op limitations being off-putting and i mentioned this in another thread. That's why they're a "bargain" as you say.

Back in the 1980's condominiums were fairly rare so you could make a case for a price premium simply based on scarcity of supply. These days the number of sales of condos are practically the same as coops.

Nice report from Corcoran which shows market down 5% on per sq ft basis for resale condos (page 9). Coops staying strong.
http://media.corcoran.com/pdf/reports/2016_Q2/Manhattan_Q22016.pdf

Interesting Corcoran report. Do we think the number of closings is skewed from people who went into contract pre-construction on new developments in 2014-2015 and are contractually obligated to close now? I.e., if closings only corresponded deals in contract in the same quarter, the market would look even much slower? (Obviously talking about condos, not co-ops).

CCL3,
Of course that is an issue, but isn't it an issue "both ways" in that some of those closings are also on the low side because at least some number of those contracts were signed when there was still some room up in the market?

http://www.nytimes.com/2016/07/01/realestate/drop-in-manhattan-home-sales-indicates-a-market-cool-down.html?_r=0

From the article:
Brokers attributed the slowdown to buyer hesitation brought on by turmoil in the financial markets and a disconnect between what sellers hope to gain and what buyers want to pay. “Sellers want last year’s prices and buyers want next year’s prices,” said Richard Grossman, the president of Halstead Property, which reported that the median price of a Manhattan apartment rose 13 percent to $1.11 million from a year ago.

A surge of new development closings pushed the average new development price to a record $3.78 million, up 28 percent in the second quarter compared with a year ago, according to Halstead. The rise in prices was driven by deals that were penned as long as two years ago but closed only in the last few months, as the buildings neared completion. “They were purchased years ago and reflect a different market than today,” Mr. Grossman said.

>Brokers attributed the slowdown to

Now brokers don't just know their neighborhood and the preferences of the boards of specific buildings, they understand global economics and markets.

What are the brokers seeing in term of price cuts in $3mm+ market? I have seen 20% price cuts in many luxury new developments.

For example
http://streeteasy.com/building/37-east-12-street-new_york

Originally started to market at almost $4k per sq ft if you look at old sales listings but that was probably highly aspirational.
http://streeteasy.com/building/17-east-12-street-new_york#tab_building_detail=1

is 4k even realistic. looks like they got 2k. seems reasonable.

I think 2k per sq ft for high-end finishes is indeed a very good price for the buyer. Initial ask was too high.