Manhattan Market Report Q3 2019
Look at any major news site, channel, or paper, and you’ll easily find a story about the economic storm on the horizon. No one knows whether these rumors are true, but everyone is taking the revolving door seriously this time around. While it’s evident whatever is going on with the U.S. and global economy involves more than the housing market, real estate maintains its importance as a prime contender of economic predictability.
Looking back to last quarter’s report, the results are in on the newly-established Mansion Tax in New York: it prompted a large number of sales in a race to beat the July 1, 2019 deadline. Since then, buyers are uncertain. The new tax coupled with recession speculation has slowed and shifted the market. Manhattan saw 12% fewer sales this quarter compared to 2018. The increased sales seen in 2015, 2016, and 2017 deserve consideration, however, and 2018 and 2019 trends are suggestive of market normalization, not crash.
The distribution of purchase price differed significantly, with only 9% of units selling for $3M and above, the fewest since 2015. Many look back to 2008 and want to avoid purchasing at the wrong time, so even with low mortgage rates, buyers are appropriately re-evaluating their price range and opting for something slightly less expensive. Declines in overall average price and average size but limited reduction in average price
per square foot support this.
While real estate continues to move, the upcoming election year, general state of politics, ever-changing trade agreements, and much more could shift things any direction, as we’ve seen with the stock market. We expect economic climate and taxes to continue dictating price, and the increased contract activity seen to lead to market stabilization.
Read the entire report here.