Times are tough on Easy Street, real estate firms said.
The average sales price for Manhattan homes fell below $2 million mark for the first time since the end of 2016, according to quarterly market reports Halstead, Douglas Elliman and Corcoran released Wednesday. The averages fell mostly because new developments, particularly those offering homes for $5 million or more, did not close as many deals, experts said.
Diane Ramirez, Halstead’s CEO, said the number of legacy contracts, where agreements were made when a project was started and finalized once construction finished, were previously bolstering prices. But she said those agreements have run their course, and other sales have sold.
“The luxury prices are dropping because we had a huge quantity of apartments that closed at the same time,” Ramirez said, referencing the legacy contracts.
Halstead’s report found that the average price for new Manhattan developments was $3.63 million in the final quarter of 2017, a 19 percent decline from a year ago.
Douglas Elliman put the new development average price at $4.06 million in the end of 2017, a 16.8 percent drop from this period last year.
And Corcoran estimated the new development average price was $3.92 million in the final quarter of 2017, a 13 percent change from the end of 2016.
Jonathan Miller, whose appraisal firm prepared Douglas Elliman’s report, said buyers were also being cautious because federal tax code changes are expected to hurt owners of expensive properties in New York.
“I think over the next year, luxury is more vulnerable to the tax law than the overall market,” Miller said.
Ramirez, however, was optimistic that the market may pick up in 2018. She said a number of new developments with units well below the $5 million range will hit the market and likely score buyers quickly.
“The other new development that we are seeing are luxury prices but not uber luxury prices,” Ramirez said. “It is very positive for everyone.”