"That's Quite A Blip" - Realtors Rattled As Manhattan Apartment Sales Plummet To 6-Year Low

As US home prices have climbed to within a hair's breadth of their all-time highs from 2006, we've asked time and time again whether this is a market "top" or a "breakout".

In each case, we've pointed to slackening transaction volume in some of the hottest housing markets in the US as a sign that, despite a purported paucity of new housing stock during the post-crisis era, high prices have left much of the market out of reach for middle- and working-class Americans (even those who might consider themselves part of the upper-middle class) as asset price appreciation has far outstripped wage growth.

And nowhere has this trend been more visible, perhaps, than in Manhattan.

To wit: After months of declines, Apartment sales in Manhattan fell in January to the lowest monthly rate since February 2012 (a six year low) as a trend in both declining sales prices and volume has intensified.

Across Manhattan, 840 co-ops and condos were sold in January, a 20.1% drop from a year earlier, when 1,051 apartment sales were recorded, according to CityRealty.

That's the lowest number of units sold since February 2012, when 799 sales were recorded at an average price of $1.50 million. Volume peaked in July 2013, when 1,721 units were sold.


A separate batch of data from the New York City Department of Finance showed 995 units were sold in December, a 15.6% drop.

Sales prices also sunk precipitously last month, logging a 15.5% year-over-year drop to an average of $1.86 million in January from an average $2.2 million a year earlier, while the average price in December fell 14.3 percent, from $2.17 million.

CityRealty's director of research said she was shocked by the drop.

"I’m a little startled, it’s quite a blip," Gabby Warshawer, director of research at CityRealty, said of the drop.

One reason for the price decline, Reuters said, was a lack of new condo buildings entering the market. A preponderance of new condos coming online has skewed prices in the market toward upwards of $2 million, Warshawer said.


That's skewed the average price of a condo to $2.8 million in January, compared with $1.3 million for co-ops, excluding data from upper Manhattan because of the area’s comparatively low activity. Only 61 units were sold in January.

Meanwhile, apartment sales priced above $10 million - the cutoff for the ulta-high-end range - have nearly doubled since 2013.

* * *

As we pointed out last month, sky-high rents and the skew toward luxury housing is forcing more Manhattan landlords to offer incentives like at least one month rent-free to help entice tenants.


If other luxury markets like Greenwich, Conn. and parts of the Hamptons are any guide, sellers of luxury Manhattan real estate will probably start pulling inventory from the market while they wait for more favorable market conditions to return...

...But given the impact of the Trump tax plan, specifically a provision that caps how much mortgage interest and state and local taxes can be deducted from federal income taxes,


booboo bshirley1968 Tue, 03/06/2018 - 08:31 Permalink

What people fail to understand is that there is a ceiling and it does not matter if you hit it going 500 feet per second (2006) or at two feet per second (today) the result is the same. People can only afford so much for shelter or retail space.

In reply to by bshirley1968

onewayticket2 booboo Tue, 03/06/2018 - 10:15 Permalink

See this startup?  The premise is city real estate is too expensive for millennial types....so this company provides communal living arrangements....Match.com meets realtor.com


taking an inflated asset and pooling renters to be able to afford it.  Sharing in the portions of the asset that are sharable....kitchen, bathroom, livingroom - but retaining private bedroom.  



In reply to by booboo

Endgame Napoleon MrBoompi Tue, 03/06/2018 - 08:33 Permalink

It is amazing that, for a person who can afford a $10-million-dollar apartment, a shift in tax policy motivates behavior that much. It is probably the same reason why so many Americans have wages so low that they cannot afford to rent a crappy, one-room apartment at $859 per month that had $200-per-month rent 10 years ago, although wages have barely risen in all that time for most, with rent now consuming more than half of monthly income for those living on earned-only income—i.e. those with no pay-per-birth monthly welfare and child-tax-credit welfare and no spousal income. That market is 100% without buyers and sellers.

In reply to by MrBoompi

Bill of Rights Tue, 03/06/2018 - 08:13 Permalink

I guess $3000+ for rent has lost its appeal.... Face it Democrat scum holding camp states, there is a MASS exodus happening in these Sates ran by you Scum bags and its gonna get a lot worse.

silverer Semi-employed … Tue, 03/06/2018 - 08:42 Permalink

Free market and common sense are weighing in. You have to wonder, what made the prices rise for years? And if the prices are always expected to rise, why not just ask for a billion? Five billion? NY, as "the world's greatest city", is defining the real estate environment by its rules. But Hong Kong is a better place to be, rated #1 instead of #16. If your property values are declining, then look no further than the US government and the NY State government. It is their policies and regulations that have put the lid on the potential of NYC real estate to continue rising. "If you can make it there, you can make it anywhere". So I guess everyplace else is now being considered by buyers as an alternative to prices that are just too damned high.

In reply to by Semi-employed …

Endgame Napoleon Semi-employed … Tue, 03/06/2018 - 08:54 Permalink

Well, I like to look at it due to the design quality. Most people do not have the money to let designers do what they want to do. I do feel sorry for the realtors and others who make their living off of the luxury market, as I once made a living in a related area, albeit a meager living in the type of business that I was in, peddling a truly superfluous custom luxury product that no one has to have. It was a fun business, though. Regardless of the political and economic-justice issues involved, luxury market customers are super-nice as customers, the vast majority of them.

Frankly, I always wondered if the limited nature of that market would ever impact people outside of the type of business I once owned and other related businesses that I worked in. Despite the housing collapse, luxury real estate did not seem to experience as much topsy-turvyness that some of the other luxury businesses experienced even before the housing collapse. We always made a profit and living and paid our business loan, but it was tough. We had far too many competitors in a narrow-as-a-thread market.

People who used to spend money like it was water in the Nineties, buying one superfluous luxury item after another, were, by the early 2000s, still willing to spent it like there was no tomorrow on a huge, bigly house, premised in the notion that housing values always go up, but they cut back on home decor, especially the Gen Xers in that market who were raised on big-box fare, anyway.

Many of them really could not afford the full gamut of top-of-the-line luxury purchases, just the big house, assuming they held on to their two high-paying jobs per household. It explains why, when working in luxury furniture sales, I went to home shows, seeing mansion after mansion with only a few rooms containing fine furniture. The rest of the rooms were spartanly furnished with Ashley’s Furniture or Rooms to Go. 

In reply to by Semi-employed …

silverer Tue, 03/06/2018 - 08:21 Permalink

Salesperson to client: "Why are you not interested in this property? Is the price too high?" Client to salesperson: "Yes. In fact, it is. And I'm buying gold now instead of overpriced real estate, which is going down now in case you haven't noticed. Sorry about your commission. Thanks anyway."

Endgame Napoleon silverer Tue, 03/06/2018 - 09:03 Permalink

It sounds like the luxury-market Millennials just have different tastes and priorities, like any other generation. The luxury market Xers were more like an amplification of the later Baby Boomers—sort of like crossing over to full Baroque from Mannerism—but most of the Xers bit off more than they could chew, financially. The Xers, too, were rejecting the aesthetic of their parents, departing from that Seventies earth-tone-with-chrome minimalism and other drawbacks of stark modernism. It will shift back. The Millennials are just creating another phase. 

In reply to by silverer

silverer Rainman Tue, 03/06/2018 - 08:47 Permalink

A city and culture with an uncertain future, along with the country it's situated in. Communism being pushed for the future. Want to spend more for something now acknowledged by many to be spinning down the drain? Trump is just a temporary rest on the road to continued decline. The communists will win, because now even capitalism can't dig the US out of the hole its illustrious US congress has dug for it. The rats will be everywhere.

In reply to by Rainman

gaoptimize Tue, 03/06/2018 - 08:22 Permalink

Following the Mayan example.  I've been warning family, and the prepper community has been warning people in general that cities like NY are death traps.

everything1 Tue, 03/06/2018 - 08:23 Permalink

It's that time of year, happens every single year.  The heat will come, I'm seeing open houses already.  Seasonal blip, prices will fluctuate with the interest rate, it's a delayed effect because greediness takes a while to wear off.

Peterman333 Tue, 03/06/2018 - 08:36 Permalink

A Manhattan apartment would be #1 on the list of things I don't want at the moment, or, ever. Okay, maybe I would have wanted one in 2001 or so and ride the value up but now or into the foreseeable future? No.

I Write Code Tue, 03/06/2018 - 13:04 Permalink

Is that mean, median, or mode?

Also, who cares, numbers for ten years have been hideously high, especially prices (mean, even median, probably not mode).

WhiteEagle1763 Wed, 03/07/2018 - 10:56 Permalink

Ah, "New York, New York".  It seems to be a lot of folks' idea of heaven on earth.  I've never been quite sure why.  Lots of people I knew wound up there.  Personally I didn't see the point of leaving flyover, and certainly not to go there.  The trouble is most US cities just aren't that nice compared to the alternatives.  If you've got skills might as well check out some of the other global cities instead, if that's what you're into.  I prefer someplace with some undeveloped land still around the area.  Which pretty much rules out the BosWash metroplex sprawl on the Eastern Seaboard.  The interior is the best part of the USA for this reason, whether the Midwest, South or Mountain West.  And in most places costs will be much lower.