The Manhattan real estate market settled into a stable growth mode in the third quarter of this year, with the median sale price rising less than one percentage point since last quarter and 4.1 percent from last year. However, the third quarter failed to add inventory to lift the market out of its persistent supply slump.
The number of homes listed for sale in Manhattan during the third quarter fell 6.0 percent from the second quarter in an anticipated drop-off in activity after the spring season. Available homes for sale remain in historically short supply, with inventory 1.2 percent below last year’s level and 15.9 percent below Manhattan’s 5-year quarterly average.
The continuing decline in inventory is led by a precipitous drop-off in the number of available co-op units, which declined 10.6 percent from last year. Conversely, the number of available condo and townhouse units increased 8.0 percent and 20.9 percent, respectively. For the first time in 4 years, there were more condo units available on the market throughout the quarter than co-op units.
Despite the supply shortage, buyers appear to be taking more time to consider purchasing. Homes spent significantly more time on the market, rising to a median time of 70 days from just 49 days in the previous quarter. While 70 days is historically a low number, it is a significant adjustment from the frenzied pace experienced in the first two quarters of 2014.
The share of homes priced in the bottom two price tiers continues to shrink. Nearly 1 in 2 homes listed for sale during the third quarter was priced above $1.29 million, led in part by the growing share of inventory made up of condo units which generally are more expensive than co-op units. Fewer than 1 in 4 homes listed for sale were priced in the bottom tier.
Price wariness among buyers seen in the third quarter will slow price growth and lengthen days on market in the coming months, condo price growth is predicted to ease modestly (-0.3 percent) in October according to the StreetEasy Condo Price Forecast.
