High-End Manhattan Real Estate Gets A Reality Check As 40-50% Of Listings See Price Cuts

Tyler Durden's picture

After a temporary dip in 2016, prices for expensive Manhattan and Brooklyn real estate seems to be on the rise yet again.  But no matter how quickly the bubble re-inflates, it can't seem to keep up with the perpetually positive outlook of New York's home sellers. 

As Bloomberg points out today, despite a rise in prices YoY, 25% of homes sold in 2Q still experienced a price cut at closing versus their original listing prices.  Moreover, as much as 40-60% of the homes sold in the more trendy neighborhoods are seeing price cuts.

In most Manhattan neighborhoods, at least 25 percent of homes on the market in the second quarter had their prices cut. The share was smaller only at the borough’s northernmost tip, in Inwood and Marble Hill. In prime areas such as the West Village and Chelsea, about half of listings had their prices trimmed.

 

Even in high-demand Brooklyn, owners realized they’d gotten too ambitious. Forty-one percent of Williamsburg listings saw a reduction in asking price, while in Bushwick, the share was 48 percent. The waterfront area that includes Red Hook had the biggest share of cuts, at 59 percent.

 

The whittling shows “that even in these areas that are really hot, it’s possible for sellers to be out of sync with the market, and that there is a limit to how high prices can go,” said Grant Long, senior economist with StreetEasy, which provided the data.

 

But, it's not all bad news for Manhattan real estate owners these days as Douglas Elliman notes that 2Q prices and volume were both up fairly substantially, on a sequential and YoY basis.

NYC

 

That said, the new development market, which has been flooded by supply additions courtesy of Yellen's accommodative interest rates, remains a key weak spot for the Manhattan market with prices per foot down 15% sequentially and listing discounts soaring to 7.5% versus units that were flying off the shelf at a 1% premium to listing price last year.

As we like to say, eventually things like math and supply/demand models actually matter...

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christiangustafson's picture

<cough> <cough> Central Park Tower <cough> luxe retail ...

ZeroLounger's picture

Huh?  OH Yeah, uh, .....huh?

 

Edit: Please tell your avatar's buttcheeks to stop staring at my eyes!

FireBrander's picture

I get a daily Zillow email of properties that may interest me; nearly all of them lately are "price reduced". The reduction is typically 2% to 4%, but still, the prices are falling...

MK13's picture

The best freaking avatar. What the hell was the article about?

helloimjohnnycat's picture

That's a nigger.

Herpes, STD's, and all of the below.

Nasty.

EuroZone's picture

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sinbad2's picture

If the people of New York knew that the radioactive wind from Hanford, blows across New York, would it effect prices?

Golden Showers's picture

Wasn't New Amsterdam built on a swamp? I mean, it's not my fault.

Right now I'm playing a drinking game called Roanoke.

Oops!

Did anyone ever hear the expression, the idiom, about the price of eggs? So...

Cabreado's picture

The "housing market" cannot appropriately collapse (30%++) without nearly the Whole House crumbling down.

gespiri's picture

Pretty soon, these house price manipulators will be manipulating each other since the regular Joe have already been pushed out of their nasty games.

Ban KKiller's picture

Fed printing miracles...buy!