At the end of 4Q 2016, we noted that NYC real estate sales volumes were collapsing as sellers seemed to be having a difficult time accepting the fact that clearing prices had dropped below their exorbitant asking prices...here was our conclusion then (see "More Bad News For NYC Real Estate As Luxury Co-Op Contracts Collapse 25%"):
"The lesson seems to be that the marginal New York City buyer has been priced out of the market while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels...that should work out well..."
Now, it seems that growing fears over the flood of new inventory slated to hit the New York market combined with the Fed's promise to keep hiking interest rates has sellers slightly more willing to compromise.
Per the following quarterly Manhattan market update from Douglas Elliman, the median sales price for apartments in the Big Apple dropped 3.3% YoY in 1Q 2017 prompting a 'surge' in deal volumes which were up 0.5%.
As Bloomberg notes, discounts versus asking prices also rose for every type of property tracked by Douglas Elliman.
Sellers who had been holding fast to ambitious pricing goals are softening their stances as they face the prospect of higher mortgage rates and more listings being added to the Manhattan market. In the three months through March, buyers of resale homes got discounts averaging 4.5 percent off the last asking prices, up from 2.7 percent reductions a year earlier, Miller Samuel and Douglas Elliman said. Discounts also increased for all other property types tracked by the firms -- condos, co-ops, new development and luxury homes -- as well as for the market as a whole.
“Sellers getting more relaxed with their pricing has certainly helped create a lot more transactions,” said Pamela Liebman, chief executive officer of Corcoran Group, which released its own report on the market Tuesday. “With prices stabilizing, buyers feel that they’re making a safer bet now.”
Meanwhile, the number of people willing to pay over asking price for the already exorbitantly prices NYC real estate continued to hover a multi-year lows.
Temporary pricing blip or beginning of a long unwind? Tough call....$2.1 million seems like such a good deal for 1,000 square feet...that's enough space for a bedroom AND a living room.