This story was originally published in Builder.
The StreetEasy Manhattan Price Index dropped to $1,142,742 in the third quarter of 2018, a decrease of 1.8%, or $20,597, since last year — marking the largest annual dip in prices since the financial crisis, according to the Q3 2018 StreetEasy Market Reports.
In addition to the decline in prices, for-sale inventory in Manhattan remained close to post-crisis highs, with nearly 5,000 new homes listed in the third quarter — a 7.8% increase from last year. Manhattan homes lingered on the market for a median of 96 days, the longest period since 2012 and eight days longer than in the third quarter of 2017.
Despite the increase in homes on the market, the number of homes sold decreased. Recorded sales in Manhattan dropped 16.9% year-over-year, with Brooklyn and Queens not far behind, falling 15.7% and 12.1%, respectively. This quarter also marked the lowest number of third-quarter sales since recovery from the financial crisis began in 2012.
"There's a palpable shift in the market happening right now that's mostly in favor of buyers, and we're not done yet. Winter is typically the slowest home shopping season, and we're already seeing a lot of homes lingering on the market," says StreetEasy Senior Economist Grant Long. "Sellers that have priced their homes aggressively will likely have to offer some substantial price cuts, or risk spending several more months trying to find the right buyer. If they don't strike a deal soon, they'll be forced to compete with yet another wave of new homes hitting the market in the spring, making their chances of attracting a buyer even tougher."
Q3 2018 Key Findings — Manhattan
- Sales prices dropped. The StreetEasy Manhattan Price Index dipped 1.8% year-over-year to $1,142,742.
- Nearly 5,000 new homes came onto the market. New sales inventory increased 7.8%, with an additional 4,921 new units listed since last year.
- More than 1 in 5 homes had their prices cut. The share of homes with a price cut rose 12.6%age points year-over-year, following an influx of new inventory. Buyers were most likely to find price cuts in the Upper West Sidev, where 24.3% of homes received one — up 25.6%age points since last year.
- Rents rose in Manhattan, and rose the most in the Upper East Side. The StreetEasy Manhattan Rent Index reached an all-time high of $3,247, a 2.2% increase over the third quarter in 2017. Rents rose the most in the Upper East Side, up 2.7% to an all-time high of $2,985.
- The share of rentals with a price cut dropped. The share of rentals that had their prices cut fell to 21.9% in the third quarter, a decrease of 6.4 percentage points from last year.
Q3 2018 Key Findings — Brooklyn
- Home prices stagnated since last year. The StreetEasy Brooklyn Price Index remained unchanged at $721,918. North Brooklyn and Prospect Park saw the largest increases in the borough, up 3.8 and 3.6%, to $1,190,797and $1,041,163, respectively.
- Inventory rose across the borough, except in North Brooklyn. Sales inventory increased 16.4% annually. North Brooklyn was the only submarket where inventory dipped, down 1.7% compared to last year.
- Recorded sales fell. The number of recorded sales dropped 15.7% in Brooklyn. In North Brooklyn, sales were down 44% since last year.
- Rents rose across the borough, except in North Brooklyn. The StreetEasy Brooklyn Rent Index rose 1.5% from last year to $2,604. In North Brooklyn, rents dipped 1.9% to $3,041 ahead of the April 2019 L train shutdown.
- The share of rent cuts dropped. The share of rentals with a price cut dipped 5.7%age points to 17.7% in the borough. The share of rent cuts decreased the most in North Brooklyn. at 7.7 percentage points, but renters were still most likely to find price cuts there with 23% of rental units discounted.
Q3 2018 Key Findings — Queens
- Sale prices increased. The StreetEasy Queens Price Index rose 4.9% to $534,754. The Rockaways experienced the largest annual increase, with prices up 13.5% to reach $500,939.
- Homes with a price cut rose the most in Queens. The share of for-sale homes offering price cuts rose 3.9 percentage points, reaching 18.2%.
- The number of recorded sales fell. The number of recorded sales was down 12.1% in Queens. Northwest Queens saw the largest decrease – down 27.7% from the third quarter of 2017.
- Rents stagnated. Queens rents remained mostly unchanged, rising 0.7% in the third quarter to $2,163.
- The share of rent cuts dropped. 16.4% of rentals in Queens had their prices cut in the third quarter, a decrease of 3.8 percentage points from this time last year. Renters were most likely to find discounts in Northeast Queens, where 18.6% of units had their rent prices cut.
The complete StreetEasy Market Reports for Manhattan, Brooklyn and Queens, with additional neighborhood data and graphics, can be viewed at streeteasy.com/blog/research/market-reports/.
This story was originally published in Builder.