The Year In Real Estate
By: Tim McKeough
Published: 12/27/2019Source: The New York TimesFeaturing Corcoran's President and CEO Pamela Liebman:
The Real Estate Market Didn’t Change Much From 2018
By Vivian Marino
Manhattan’s housing market trudged through highs and lows in 2019. Records were shattered. Sales surged and stumbled. Long-awaited luxury high-rises opened.
Yet the market over all ended little changed from 2018.
For many real estate professionals, this wasn’t a bad thing. “Everybody was challenged by this market, but it turned out to be much better than I thought it was going to be at the beginning of the year,” said Steven James, the chief executive of Douglas Elliman Real Estate’s New York City Brokerage.
Andrew Wachtfogel, the head of research for Elliman’s development marketing, seemed encouraged, too. “The market is working through its inventory. Maybe it’s bottoming out.”
The past decade was marked by a construction boom. Luxury inventory alone (loosely defined as properties above $3 million) jumped around 20 percent from 10 years ago, according to the appraiser Jonathan J. Miller. As supply mounted, market sentiment shifted toward buyers, who in headier days, not long ago, were readily purchasing from floor plans and encountering bidding wars that drove up prices.
The urgency to buy remained largely absent in 2019, as it was the previous year. Listings continued to linger until sellers lowered prices or offered other incentives. Just over half of all properties sold below asking price, Mr. Miller’s data found, while only 6 percent exceeded the price. At the market’s peak, in 2015, nearly a third of all sales had sold above list price.
“We’ve had a bit of a correction, and prices are still correcting,” Bess Freedman, the chief executive of Brown Harris Stevens, said, adding that at all price points “buyers are looking for value and they’re almost insulted if you overpriced.”
For 2019, the average sale price for all Manhattan condominiums and co-ops was projected to rise slightly to $2.12 million from $2.07 million in 2018, according to a year-end report by CityRealty, which tracks apartment sales.
“There was nothing terribly different year over year,” said Daniel Levy, the chief executive of CityRealty, “2019 felt like 2018 all over again.”
But unlike 2018, there was a burst of activity in the second quarter (followed by a drop in the third), as luxury-home buyers rushed to avoid New York State’s higher “mansion tax” that took effect July 1. Among the dizzying number of transactions were three units purchased by Amazon’s founder, Jeff Bezos, at 212 Fifth Avenue for a total of $80 million.
For the year, closed transactions for all condos and co-ops was expected to reach 10,400, with sales totaling $21.2 billion, slightly lower than the 10,531 transactions in 2018 and $21.8 billion in sales, according to CityRealty. New-development sales edged higher, to a projected 1,225 totaling $5.8 billion, from 1,108 and $5.3 billion. Still, it was a far cry from the 1,848 sales totaling $8.9 billion in 2017.
Dominating the market was the newly opened 220 Central Park South. Seven of the city’s top 10 sales took place there, including the hedge fund manager Kenneth Griffin’s purchase of four full floors for nearly $240 million, a national record. He joined other well-heeled residents who closed on sales there over the past year. They included Gordon M. Sumner, a.k.a. Sting, who paid $65.75 million for a penthouse, and a buyer, believed to be Daniel Och, another hedge fund manager, who acquired a penthouse duplex for $92.7 million, the year’s second-highest sale in the city. (Many of these buyers had entered into sales contracts before the building was completed.)
The city’s townhouse market also posted a record. A double-wide house at 14-16 East 67th Street, once home to Bob Guccione, the founder of Penthouse magazine, sold for $77.1 million. The biggest co-op sale was a duplex at 834 Fifth Avenue, where the investment banker John Gutfreund had lived; it sold for $53 million, less than half the initial $120 million asking price.
Pamela Leibman, the chief executive of the Corcoran Group, was cautiously optimistic about 2020, although she acknowledged that the upcoming presidential election could temporarily sideline some buyers.
“Sellers are finally adjusting prices to the market,” she said, “and buyers are finding good values out there, combined with low interest rates. It’s a no-brainer.”
Copyright © 2019 The New York Times Company. Reprinted with Permission. Vivan Marino/The New York Times.