Douglas Elliman Real Estate and Miller Samuel Real Estate Appraisers released reports Thursday showing the number of sales declined year over year for the fourth quarter of 2018 in Brooklyn, Queens and the Riverdale section of the Bronx, as they did in Manhattan.
"I think a lot of the buyers have gone to the sidelines," Douglas Elliman NYC CEO Steven James said.
The number of sales began to decline in the last quarter of 2017, and that continued through the last quarter of 2018.
"The most important thing from the fourth-quarter report...If you look at all the areas, whether it's Brooklyn, Queens, Manhattan, Riverdale, Westchester, everywhere, it's all the same story," James said. "It's about the reset. It's about the changing the mindset of the seller. The buyer has already changed their mindset has already changed. They're not buying into the story...The last to receive the message is the seller."
The message, he says, is, lower your price to sell. The reasons for the change, he says, are general uncertainty, that prices had continued to rise and are in a correction, and President Trump's new tax law that limits local and state deductions to $10,000.
"We have another year to go, maybe a little bit longer," James warned. "It's in a consumer's best interest maybe to go into a rental."
That may be because the research shows rental concessions, like a free month's rent, are on the rise: up to 44 percent of December 2018 rental contracts in Manhattan, from 36.2 percent in December 2017; in Brooklyn, 49.2 percent from 46.1 percent; and 52.8 percent in Queens, up from 50.2 percent.
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Here are the fourth-quarter report's highlights as provided Douglas Elliman Real Estate and Miller Samuel Real Estate appraisers:
BROOKLYN SALES MARKET HIGHLIGHTS
Overview
- The market continued to be characterized by steadily rising prices, and a fast-moving pace
- The number of sales declined year over year for the fourth consecutive quarter
- After reaching a record low in the prior year quarter, listing inventory rose sharply
- Median and average sales price increased year over year for the second consecutive quarter
Key Trend Metrics (compared to same year ago period)
- Median sales price increased 1.9% to $785,000
- Average sales price declined up 5.2% to $998,050
- Number of sales slipped 5.8% to 2,474
- Listing inventory jumped 74.9% to 2,993
- Days on market was 78 days, down from 92 days
- Listing discount was 3.4%, down from 4.1%
- Luxury median sales price was up 1.3% at $2,430,000
QUEENS SALES MARKET HIGHLIGHTS
Overview
- Consistency in setting new price records, sliding sales, and rising inventory trends
- Seventh consecutive quarter with average sales price record
- Fifth consecutive quarter of year over year declining sales
- Listing inventory rose year over year for the seventh consecutive quarter
Key Trend Metrics (compared to same year ago period)
- Median sales price rose 1.6% to $568,000
- Average sales price increased 2.1% to $637,322 [record]
- Number of sales declined 11.5% to 3,248
- Listing inventory rose 25.6% to 5,160
- Days on market was 78 days, down from 105
- Listing discount was 4.7%, up from 1.5%
- Luxury median sales price increased 2% to $1,300,000
RIVERDALE SALES MARKET HIGHLIGHTS [includes Fieldston, Hudson Hill, North Riverdale and Spuyten Duyvil]
Overview
- Price trends moved higher despite rising inventory
- All price trend indicators move higher as sales fell sharply
- Listing inventory edged higher, but marketing time dropped
- Negotiability eased nominally as the market pace slowed
Key Trend Metrics (compared to same year ago period)
- Median sales price rose 20.8% to $320,000
- Average sales price increased 6.4% to $440,917
- Number of sales fell 23% to 124
- Listing inventory rose 6.8% to 156
- Days on market was 90 days, down from 115 days
- Listing discount was 3.9%, up from 3.3%
- Luxury median sales price jumped 8.7% to $1,125,000
MANHATTAN SALES MARKET HIGHLIGHTS (released last week)
Overview
Co-ops & Condos:
- Median sales price slipped below the $1 million threshold for first time in three years
- Number of sales declined year over year for the fifth consecutive quarter, but size of decline continued to ease
- Fifth consecutive year over year gain in re-sale inventory at rising rate
- Median sales price and number of sales for co-ops outperformed condos
- Highest market share of cash sales in the five years of tracking this metric
- Lowest market share of bidding wars in six years
- Most inventory gains continued to occur in the studio and 1-bedroom markets
- The rise of luxury price trend indicators was attributable to the gain in average square footage of sales
Key Trend Metrics (compared to same year ago period)
- Median sales price declined 5.8% to $999,000
- Price per square foot rose 4.7% to $1,684
- Average sales price increased 3.5% to $1,963,938
- Number of sales declined 3.3% to 2,432
- Listing inventory rose 11.8% to 6,092
- Days on market slipped 4.1% to 93 days
- Listing discount was 6.2%, up from 5.2%
- Absorption rate was 7.5 months, up from 6.5 months
MANHATTAN RENTAL MARKET HIGHLIGHTS
Overview
- The Manhattan rental market saw fewer new leases, more concessions, and aggregate prices skewed upward by higher quality rental housing stock.
- Median net effective rent slid year over year for the second consecutive month
- Vacancy rate continued to fall year over year, down for the seventh consecutive month
- Market share of concessions rose year over year for the forty-third consecutive month
- Mid-tier, entry tier and starter median rent moved higher year over year
- Luxury median rent fell year over year for the fifth time in the past six months
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price edged up nominally by 0.2% to $3,300
- Rental price per square foot rose 3.3% to $68
- Average rental price slipped 0.3% to $4,145
(Net Effective Rent – includes concessions)
- Median rental price declined 0.3% to $3,197
- Share of new rental transactions with OP or rent concessions was 44%, up from 36.2%
- Size of concession was 1.2 months of free rent or equivalent, down from 1.3
- Manhattan vacancy rate fell to 1.78% from 1.90%
- Number of new leases slipped 38.5% to 3,240
- Listing inventory fell 17.5% to 4,956
- Days on market was 32, down from 55
- Listing discount was 2.8% down from 3.1%
BROOKLYN RENTAL MARKET HIGHLIGHTS
Overview
- The Brooklyn rental market continued its trend of rising rents skewed higher by the influx of higher quality new development rentals.
- Market share of 2-bedroom and 3-bedroom rentals rose 1.8%, skewing overall price trends higher
- Median net effective rent rose year over year for the second time in five months
- Market share of concessions increased year over year for the 35th consecutive month
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price was $2,738 up 1.4%
- Rental price per square foot rose 2.2% to $44.88
- Average rental price rose 3.7% to $3,113
(Net Effective Rent – includes concessions)
- Median rental price slipped 0.6% to $2,628
- Share of new rental transactions with OP or rent concessions 49.2%, up from 46.1%
- Size of concession was 1.4 months of free rent or equivalent, up from 1.2
- Number of new leases rose 2.5% to 915
- Listing inventory declined 13.8% to 1,971
- Days on market was 31, up from 29
- Listing discount was 2.1%, down from 2.3%
QUEENS RENTAL MARKET HIGHLIGHTS
Overview [Northwest Region]
- The Amazon "HQ2" announcement has led to speculation that the market will tighten soon if not already. It hasn’t.
- Rental price trend indicators skewed higher by an influx of new development product
- Market share of concessions increased year over year for the 4th consecutive month
- Only 2-bedrooms saw a year over year rise in rental market share
Key Trend Metrics (from same period last year)
(Face Rent)
- Median rental price was $2,774, up 0.9%
- Rental price per square foot rose 9.3% to $49.95
- Average rental price rose 2.8% to $2,910
(Net Effective Rent – includes concessions)
- Median rental price rose 1.2% to $2,680
- Share of new rental transactions with OP or rent concessions was 52.8%, up from 50.2%
- Size of concession was 1.1 months, down from 1.2
- Number of new leases rose 7.3% to 265
- Listing inventory declined 24.9% to 438
- Days on market was 27, down from 32
- Listing discount was 1.8%, down 2.4%
- New development market share was 38.9%, down from 40.9%