Sellers at the high end of Manhattan real estate are beginning to accept lower prices, according to the Q4 2019 StreetEasy Market Reports.
The price threshold for Manhattan luxury homes, which constitute the top 20% of the market, fell to its lowest level since 2013, according to the Q4 2019 StreetEasy Market Reports [i]. To land in the luxury tier, homes had to be priced at or above $3,816,835 — a 6.1% drop from the top threshold in the previous year.
This fourth-quarter drop in the luxury threshold shows that many sellers at the top of the market have finally begun to accept lower prices in order to stand out amid the growing surplus of high-end homes. Even as price levels fell in the fourth quarter, luxury inventory expanded 12.2% over the previous year, with 4,354 homes for sale above the $3.816M threshold.
“With so much new construction saturating the Manhattan real estate market, we were bound to see prices start to sink at record paces,” says StreetEasy Economist Nancy Wu. “This is happening across all price points and boroughs, as prospective buyers wait out the market from the comfort of their rentals. Market dynamics in 2020 will continue to favor the buyer across all price tiers, and many sellers will have to face the fact that if they want to sell, it may very well be for less than their initial asking price.”
See below for additional sales and rental market trends across Manhattan, Brooklyn and Queens.
Manhattan Home Prices Fall — But More Slowly
Manhattan’s sales market remained sluggish. Home prices fell 3.7% — the slowest pace of 2019 — to $1,086,217, according to the StreetEasy Manhattan Price Index [ii]. Meanwhile, total sales inventory rose 3%, and homes lingered on the market for 96 days, 10 more than last year. Prospective Manhattan buyers are still in the driver’s seat, with significant negotiating power and a huge inventory of homes to choose from.
Brooklyn Rents Leap Upward
Rents in Brooklyn continue to rise at a record pace. Boroughwide, the StreetEasy Rent Index [iii] jumped 5.2% annually in the fourth quarter, its biggest leap in six years. North Brooklyn [iv] led the race with the highest growth in rents (up 5.9% to $3,238), as the area rebounds from the long-planned but suddenly canceled L train shutdown.
Queens Home Prices Stay Flat as Inventory Grows
Queens remains a great option for buyers seeking relative affordability in the city. Fourth-quarter prices stayed unchanged from a year prior, at $509,202. Buyers also had more inventory to choose from than a year earlier, with total inventory growing 1.2% to 4,308 homes.
See our Market Reports page for previous editions. Definitions of StreetEasy’s metrics and monthly data from each report can also be explored and downloaded via the StreetEasy Data Dashboard.
[i] The StreetEasy Market Reports are a monthly overview of the Manhattan, Brooklyn and Queens sales and rental markets. Every three months, a quarterly analysis is published. The report data is aggregated from public recorded sales and listings data from real estate brokerages that provide comprehensive coverage of Manhattan, Brooklyn and Queens, with more than a decade of history for most metrics. The reports are compiled by the StreetEasy Research team. For more information, visit https://streeteasy.com/blog/research/market-reports. StreetEasy tracks data for all five boroughs within New York City, but currently only produces reports for Manhattan, Brooklyn and Queens.
[ii] The StreetEasy Price Indices track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2007 in Brooklyn and Queens. Given this methodology, each index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Levels of the StreetEasy Price Indices reflect average values of homes on the market. Data on the sale of homes is sourced from the New York City Department of Finance. Full methodology here.
[iii] The StreetEasy Rent Indices are monthly indices that track changes in rent for all housing types and are currently available from January 2007 in Manhattan, January 2010 in Brooklyn, and January 2012 in Queens. Each index uses a repeat-sales method similar that used to calculate the StreetEasy Price Indices. The repeat method evaluates rental price growth based on homes in a given geography that have listed for rent more than once. More details on methodology here.
[iv] The North Brooklyn submarket includes Williamsburg, East Williamsburg and Greenpoint.
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