NEW YORK, NY - Uncertainty is the enemy of all markets and we are in a perfect storm: an unclear resolution of the trade war, an upcoming presidential election and unknown outcome as to a recession (existence/strength). The absence of international buyers due to the strong dollar and overdevelopment in the luxury condominium sector are draining the sense of urgency that exists in markets more balanced in terms of demand and supply. The recently increased mansion taxes and decreased deductions are also dampening the market. It is thus necessary to create urgency using other means (e.g., compelling pricing).
On a positive note for buyers, cheap money and a strong stock market present an enormous opportunity to extract return. Competition for buyer attention is prompting developers to offer incentives to move product. There is also no better time to trade up, the discount on the sale being outweighed by that on the purchase.
Bright spots:
*Momentum in the market exists: contracts signed per month increased 3.1% YOY (we would have expected a decrease given the 2Q19 tax change anomaly) and months of supply decreased 2.5% (product is being absorbed faster than it’s being listed)
*90% of closings were under $3 million and despite most price points being down YOY, closings of apartments under $500,000 increased 4.8%
*The number of all-cash deals were down approximately 7%, indicating buyers are leveraging the low rate environment and helping fuel activity
Advantage goes to consumers in markets when demand is down and supply is up, given they hold the upper hand in negotiations. Please see the 3Q Compass Market Report for more details.
Sources: Manhattan residential brokerage 3Q19 reports
Julia Hoagland and her team bring expertise to the Manhattan marketplace through extensive data examination and thoughtful interpretation. They were ranked number one in their office multiple times in the past 14 years, and in the top 1% of nationwide agents and in the top 5% of Manhattan agents by Wall Street Journal/Real Trends rankings and the Real Deal. JHT has specific core competence in the downtown loft market, repositioning unsold properties and estate preparation and sale. In addition to her work with local and national clients, Julia's international clientele take her annually to Hong Kong and Europe.