Manhattan: Perception Vs. Reality in Compass' 2015 Third Quarter Market Report
Posted by Julia Hoagland — October 2, 2015
NEW YORK CITY, NY - Despite healthy levels of condominium development, sales activity is driving available inventory down. This is very category-specific: while the under-$3M market is still robust and demand is outpacing supply, supply of luxury product is increasing. Foreign buyers continue to exert influence: China’s currency devaluation is lowering purchasing power for buyers from that region; however, the loosening of restrictions on currency outflow is serving as a counterbalance. Co-ops sold for on average 37% below resale condos and 55% below new development condos. Because co-ops are typically older than condos, and given the convoluted methodology of NYC property tax determination, co-ops generally have lower average monthlies. The arguments are compelling for qualified buyers interested in primary residences to consider co-ops.
- Overall average absorption rate (=months of supply) is 4.9 months (down 20% YOY; a seller's market is <6 months supply). For perspective, in the depths of the recession after the global financial crisis, absorption was 22.2 months
- Total available inventory is 6,366 units (~50/50 co-op/condo). In the depths of the recession after the global financial crisis, inventory approached 14,000
- 50% of Manhattan apartments sold for over a million dollars (median = $1.04M)
Median time on the market was 45 days; this dynamic is less prevalent in the $10M+ market where properties took 91 days on average to go into contract. The most serious buyers with their brokers are looking every day for new inventory, and will get in ASAP to view. Serious buyers generally pay the most for a property (FMV=market-clearing price). In all markets, proper pricing (along with expert marketing and maximum exposure) still leads to the best terms.
For more details, please see the comprehensive Compass 2015 Third Quarter Market Report.
Launched in 2013, Compass is a technology-driven real estate platform with offices in New York City and Washington, D.C., that combines exceptional agents with best-in-class technology to make the process of buying, selling and renting a home intelligent and seamless.
Founded by Ori Allon—the former Director of Engineering for Twitter—and Robert Reffkin—formerly Chief of Staff to the President and COO of Goldman Sachs—Compass is the first residential brokerage in the country to offer a proprietary mobile app exclusively for its agents, enabling them to update listing, conduct searches, respond to leads and communicate with clients. The agent app, in addition to the company’s integrated consumer web and mobile platforms, was built by a team of in-house engineers who hail from companies including Google, Twitter, and Facebook.