Price growth in New York City real estate has slowed since last year, a trend that many buyers hope will give them the bargaining power to secure their ideal home. While price trends in certain neighborhoods have indeed become friendlier to buyers over the past year, other neighborhoods continue to face a level of competition that favors sellers.
Our recent research showing varying demand by price on StreetEasy confirms that budgets remain the key factor for buyers determining where to look and what to expect when shopping for a home. With this in mind, we updated StreetEasy’s Buyer/Seller Market Index, which incorporates time on market, price cuts, and ultimate selling price in relation to asking price. We then split our findings into two budget ranges: $600,000 to $800,000 and $1 million to $1.2 million. Within these ranges, we sought out neighborhoods where sellers have the upper hand and neighborhoods where buyers could benefit from negotiating.
Buyers Have Edge in Midtown Manhattan
Manhattan neighborhoods dominate the top buyers’ markets for both price ranges, with Midtown and surrounding neighborhoods ranking among the top five in each. Midtown particularly favors shoppers in the higher budget range, with more than 60 percent of the homes in the $1 to $1.2 million range receiving price cuts while listed on StreetEasy. Midtown apartments within both budget ranges tend to spend roughly four weeks longer on the market than the borough median.
Some markets outside of Manhattan favor buyers in the lower price range. Those willing to extend their commute to the Bronx received, on average, a 3 percent discount from the original listing price in Riverdale. But, for those who wanted to stay in Manhattan and were after lower-priced apartments, buyers faced a competitive crowd in Washington Heights and Central Harlem, where the list price was not discounted. In Brooklyn, Williamsburg topped the buyer’s market list for lower budgets, where homes in the $600,000 to $800,000 range spent a median of more than 3.5 months on market, and buyers received a median of 3 percent off original listing prices.
Sellers Hold the Power in Broader Brooklyn
Buyers will have a harder time bargaining in Brooklyn neighborhoods south of Williamsburg. Neighborhoods further west and south in the borough dominated the top markets for sellers, particularly among the $600,000 to $800,000 range. From Brooklyn Heights to Kensington, homes in this area of the borough tended to sell quickly, and with few discounts from their original listing price on StreetEasy. Buyers in these neighborhoods faced tougher competition in 2016, a trend that will continue as large numbers of homeowners continue to seek value in neighborhoods further away from Manhattan.
|Home Buying Budget: $600,000-$800,000|
|Top Buyers’ Markets||Top Sellers’ Markets|
|Lenox Hill||Carroll Gardens|
|Home Buying Budget: $1M-$1.2M|
|Top Buyers’ Markets||Top Sellers’ Markets|
|Lenox Hill||Brooklyn Heights|
|West Village||Clinton Hill|
|East Village||Downtown Brooklyn|
Lower Budget Doesn’t Necessarily Shrink Accessible Home Inventory
For homes with a home-buying budget in the $1 million to $1.2 million price range, ample inventory exists in many core neighborhoods of Manhattan and Brooklyn with easy commuting distance to Midtown and Downtown areas. A total of 33 neighborhoods had at least 10 units for sale in this price range in 2016, including Midtown, West Village, and Flatiron in Manhattan, and Brooklyn Heights and Williamsburg in Brooklyn.
For those on a more modest budget — $600,000 to $800,000 – plenty of inventory exists in these same neighborhoods. However, those looking in these areas at lower price points will need to consider more tradeoffs, including size and amenities. Those willing to search for homes slightly further from Midtown will be rewarded with a greater variety from which to choose. A total of 60 neighborhoods had at least 10 homes listed on StreetEasy in the $600,000 to $800,000 range in 2016. Many of these, including Ditmas Park in Brooklyn and Jackson Heights in Queens, are located farther away from Manhattan, reflecting tradeoffs in commuting time for larger, more affordable units.
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How We Did It
To determine NYC neighborhoods where either home buyers or sellers have more negotiating power, StreetEasy created the Buyer/Seller Index. The index combines the sale-to-list price ratio, the percent of homes with a price cut and the number of days homes spent on the market (measured as days on StreetEasy). Relative to other neighborhoods in NYC, buyers markets are identified as those with a higher index value, driven by more price cuts, homes staying on the market longer, and lower sale-to-list price ratios compared to other neighborhoods in our analysis. Sellers’ markets are those with a lower index value, where homes are less likely to see a price cut, sell more quickly, and have sale-to-list price ratios closer to or exceeding 100, indicating buyers are paying above initial asking prices.