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Price increases 'overpowered' drop in sales of Manhattan co-ops and condos over past decade

Despite a sharp slowdown in transactions over the past decade, the median sales price for Manhattan co-ops and condos was up nearly 25 percent from 2010, according to Douglas Elliman's latest report.

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Decades generally get named after they have ended, so what to call 2010-2019? If you’re a Manhattan buyer or seller, something like "upside-down teens" seems to fit (with apologies to "Stranger Things").

That’s because things are not always what they might seem. For example, in the Manhattan co-op and condo market, there was a sharp decline in the total number of sales from beginning to end, according to Douglas Elliman’s 2019 Manhattan decade sales market report, so you might expect the severe contraction in transactions to have hurt prices, but that’s not what happened—in fact, the opposite is true.

Sales volume in total dollars rose throughout the decade, according to the report, which also says that the median sales price was up nearly 25 percent from 2010. Notably, listing discounts in 2019 were at their highest level since 2010.

Douglas Elliman also released its 2019 Manhattan townhouse sales market report, a segment that also showed median sales price gains over the past decade. But the market share of townhouse sales was 1.9 percent of all residential sales, the lowest share since 2010. The pace of the townhouse market is slow, and sales are at their lowest in the past decade, according to the report.

“While smaller sales were booming in the co-op and condo market, townhouses were essentially a luxury submarket where activity has been cooling in the latter half of the decade,” said Jonathan Miller, president and CEO of appraisal firm Miller Samuel and the author of the reports. “Across all markets, the big takeaway from the past decade is that the overall rise in pricing has overpowered the decline in sales.” 

Aside from 2017, the annual number of sales of Manhattan co-ops and condos has fallen year over year since 2014. Over the past decade, the median sales price rose 24.4 percent to $1,095,000.

“It’s not surprising that sales have dropped, especially considering the effects of the new real estate tax laws over the past few years. What is a bit surprising, given the rise in new development towards the end of the decade, is that the most price gains we saw were for smaller apartments,” says Steven James, president and CEO of Douglas Elliman, New York City.

“The report shows that the median sales price for studio apartments was up 27.3 percent, while homes with more than four bedrooms saw a drop in pricing of 2.7 percent,” James says.

Other market reports

CORE released its year-end 2019 townhouse report, which covers sales of one- to three-bedroom houses in Manhattan and Northwest Brooklyn, and showed a deep dive in the number of homes sold as prices continued to fall.

“The townhouse market tumbled in the second half of 2019,” said Garrett Derderian, managing director of market analysis at CORE. “There was a 29 percent drop in the number of sales and a 34 percent drop in the number of contracts signed. By nearly all metrics, this was the slowest second-half year since 2011.”