Buyers continued to find improved value in the Manhattan market during Third Quarter 2019. Last quarter proved to be an anomaly, when the impending state mansion and transfer tax changes drove a rush to close high-end deals and spiked price statistics. With prices lower, the number of sales may be stabilizing. Second quarter seems to have “borrowed” from third quarter’s activity, but when combined, second and third quarter closings in 2019 actually exceeded 2018 by 4%. Meanwhile, buyers also have more choice: inventory rose for the sixteenth consecutive quarter.
This quarter, closed sales fell 4% year-over-year to 3,146 closings, the lowest third quarter in Manhattan since 2009. This decline was driven by a 13% drop in resale condo sales. In a positive sign, resale co-op sales held steady year-over-year and improved 7% versus the prior quarter. New development sales actually improved 2% from last year. Signed contracts moderated, but only by 2% annually.
With sales down, active listings grew 3% year-over-year to over 7,400 units and average days on market rose nearly half-a-month to 112 days, each seven-year highs. However, both statistics were down versus Second Quarter 2019.
After reaching a record high last quarter, price statistics fell back to earth. In Third Quarter 2019, median price fell 8% to a four-year low of $1.010M while average price dropped 13% to $1.653M, a five-year low. Price per square foot figures also dropped, but by a lesser amount. These declines were exaggerated by Second Quarter’s “poaching” of luxury sales (there was a 25% drop in closings over $2M, plus a temporary spike in new development closings.
A variety of factors impacted the Brooklyn market during Third Quarter 2019 including uncertainly following the state mansion and transfer tax increases that took effect on July 1st. The new law prompted resale buyers to pause but new development units that went into contract in earlier quarters were unaffected. While new development closings increased 13% annually, resale condo and co-op sales fell in those markets.
For Brooklyn buyers seeking value, constrained inventory continues to hinder sales activity. During Third Quarter, listings at the high end expanded annually at three times the rate compared to listings at low end and with the recent construction boom, new development supply increased two-and-a-half times faster than resale inventory. Overall, there were 1,450 closings during Third Quarter 2019, which was 5% lower than a year ago and the fifth consecutive quarter of annual sale declines.
Overall average price was unchanged versus last year and median price fell by just 3%. However, resale condo prices remained persistently high and this quarter resale condo median price was the second highest seen in over ten years. The New development median price, on the other hand, reached its second lowest point since 2016 as new product under $750,000 lured buyers. Median co-op price reached a ten-year record high, slowing co-op sales by 6% versus last year.