Listing inventory for Manhattan slipped in the second quarter of the year, with the steepest drop at the high end of the market.
Overall in the borough, listing inventory fell by just under a percent, according to the quarterly report from Douglas Elliman. Resale inventory, which represents 83 percent of the Manhattan market, dropped by more than 1 percent in the first decline since the start of 2014. In the luxury market — which represents sales above $4.8 million — inventory dropped by 11 percent, with resale inventory in that sector falling by nearly 23 percent.
Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report, said inventory is falling because overpriced listings are now expiring.
“It’s a good development for the high end because you don’t have this heavy volume of incorrectly priced listings,” he said. “There’s less of that distraction on the market.”
It’s more evidence that prices are shifting to reflect the market, according to Miller, who said over the past few quarters sales in the borough have increased, indicating that sellers are becoming more willing to meet buyers.
Manhattan’s median apartment price hit almost $1.2 million in the quarter. It was not only a year-over-year increase of more than 7 percent but also a record. The new development median price was $3.3 million, a 23 percent jump over last year, while the resale median price was $975,000. For condominiums, the median price was nearly $1.9 million, a 19 percent increase on last year, while the median price of a co-op was $793,750. For the luxury market — the top 10 percent of all apartment sales — the median price was $6.8 million, a nearly 4 percent increase over last year.
About 14 percent of all market transactions had bidding wars, showing the market is still “tight” — though the majority of bidding wars are at the lower end of the market. In the studio market, 16 percent of the sales closed above the list price, while just 7 percent homes with four or more bedrooms sold for more than their list price. In the third quarter of 2015, 31 percent of sales closed above their list price, a record of at least nine years.
“The market is nowhere near as insane as it was in 2015. But it’s still brisk … which makes sense because inventory is falling and sales are rising,” said Miller.
Overall, the listing discount from last list price was just over 6 percent, according to the report. However, at the luxury end of the market, the listing discount was much steeper at more than 10 percent. That’s the highest it’s been since the fourth quarter of 2010.
“It doesn’t mean that market is coming down,” said Miller. “The aspirational prices era is over.”