The New York City luxury real estate market, grappling with an oversaturated condo market and economic uncertainty, saw the biggest drop in sales in the past decade, with new development registering the steepest declines.
According to Stribling & Associates' Year End 2018 Luxury Report, which covers Manhattan and Brooklyn properties $5 million and above, the number of sales fell 28 percent in the second half of 2018 compared to the previous year. Sales of new development priced $5 million and over dropped 39 percent year-over-year, while resales of condos in the same category dropped 10 percent.
The total number of condo sales, 605, was the lowest number recorded since 2014, when there were 484 sales.
Luxury co-ops fared better, with 190 sales in 2018, an increase of 4 percent over the previous year. Garrett Derderian, director of data & reporting at Stribling & Associates, says that compared to condos, luxury co-ops appear affordable. Owners are adjusting their prices to meet the market, with the understanding that many of these apartments need substantial work, he says.
"Many luxury co-ops sales tend to be properties of a unique value,” says Derderian “That is a major draw for buyers, who prefer them over what is now perceived to be an oversaturated condo market, where the properties can appear more ‘cookie-cutter.’”
Signed condo contracts declined 21 percent, the least amount of contracts signed since 2012, which Derderian attributed to economic uncertainty and the perception the market is in decline.
Kirk Henckels, director of Stribling Private Brokerage, pointed to the “increasing disparity between the super wealthy and the merely wealthy,” which appears to be insulating the value of trophy properties. Case in point: The median sale price for luxury condos was $7,615,890, up 5 percent year-over-year, and the highest priced condo sale was 520 Park Ave., PH60, for $73,800,000.
“The rest of the luxury market seems to be struggling with the degree of uncertainty in the current world,” Henckels says.
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