Manhattan Condos, Now A Buyer’s Market

Posted by Wei Min Tan on September 6, 2017

The Manhattan property market has changed direction. While previously it was a heated, highly competitive market where buyers compete for limited inventory, now listings are sitting on the market longer and buyers have an advantage in negotiations.

This change is driven by factors including a strong US dollar, weakening global economies (eg China’s) and uncertainty in the stock markets. The upcoming US presidential election between Donald Trump and Hillary Clinton is also causing investor buyers to have a wait-and-see attitude. In addition, Brexit has affected companies doing business with Great Britain because of devaluation of the pound sterling.

World Trade Center, with Tribeca on the left and Battery Park on the right.

Apartment listings are now on the market longer. For example, a good listing used to have bidding competition and be sold within 1 week. There would be 50 people at the first open house and 15 offers, after which the seller would select the highest and best offer.

Now, a good apartment in a good building can be on the market for 2 months and still not have an accepted offer. There would be offers, but usually not good enough to be accepted right away like during a seller’s market.

Buyers are in a better position to negotiate. In a heated market, sellers could dictate minimum price bids to be considered. There used to be deadlines by which buyers needed to submit their “highest and best” offers. Now sellers welcome all bids.

Seller’s agents are more diligent in following up. It’s also easier for less established buyer’s agents to get appointments to show high end listings.

The $700K to $3 million segment

For buyers in the $700K to $3 million price range, it’s a good time for apartment shopping.

There are more apartment choices, buyers have more time to decide and buyers are not pushed to overbid.
This segment represents the core, perhaps 80 percent, of the Manhattan market. There is continued demand, just not a frenzy. Studios, one and two bedrooms would be in this category.

When pricing apartments to sell, seller’s brokers are more conservative and would tend go with recent comparables, rather than add a premium to recent comparables.

I don’t see or expect prices decreasing. Rather, the rate of appreciation wouldn’t be as high as the 20% we observed in the past 2 years. I expect appreciation to stay in the historical 9% to 11% range.

Properties in the $5 million to $10 million segment

This price range represents the larger apartments, 3 bedrooms and above. The mansions by Manhattan standards. The 4 bedroom in West Village, the nice Soho loft, the Central Park-facing 3 bedroom are examples of condos in this segment.

Traffic is definitely less than in the sub $3 million segment. Higher price point means less buyers which means better discounts.

Properties in the $10 million + segment

This market just stopped! As I explained on CNBC, developers are overbuilding in this segment especially on Billionaire’s Row. Back then, there was question on where all these ultra luxury buyers would come from. Now, none are coming. Some ultra luxury developments are being put on hold.

That said, this ultra luxury segment represents a tiny fraction of total inventory. My guess would be less than 0.5 percent. Whatever remaining buyers out there are now in a position to negotiate a handsome discount.



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Wei Min Tan is a property broker focusing on Manhattan, New York luxury condominiums and foreign buyers. He is often interviewed by the media including CNN, The New York Times and The Wall Street Journal on the subject of foreign buyers of Manhattan property.