Manhattan Is New Home to the Bluelight Special

Welcome to Manhattan, the new home of the bluelight special. More homes traded hands on the gilded isle during the third quarter of the year than at any time since 2015, according to a new report from Douglas Elliman Real Estate. And it was a buyer’s market, Crain’s reports – with buyers refusing to sweeten their offers and sellers responding by cutting asking prices by an average of six percent. 

"Buyers are just sitting there, waiting for the sellers to get in sync with what is happening now, and not what was happening two or three years ago," says Jonathan Miller, head of appraisal firm Miller Samuel, which prepared the report.

Many sellers took the hint, and as a result sales volume hit 3,153 homes, including co-op and condo apartments, up 15 percent compared to 2016. Homeowners had several reasons to take the plunge, even if it meant offering a steep discount. To start with, the median price for resales increased to $975,000 – a record, but a modest 3 percent higher than last year. During boom times, homeowners keep their homes off the market in hopes of getting more money by waiting for further price increases. In this case, 3 percent is barely more than inflation, meaning there is nothing to gain by holding off. The threat of higher mortgage rates might also have nudged sellers to put their homes on the sales block. 

The supply of inventory fell slightly as a result of all that activity, though the action was concentrated at the lower end of the price spectrum. The market was soft at the top, a problem that is even more pronounced for luxury properties. The F-word – foreclosure – is even being uttered on Billionaires’ Row. 

New developments appeared to have a record-setting quarter, but Warburg Realty noted that these figures are actually indicative of when the contracts were signed, and are not a good barometer for what is happening now. "Most of those records ... pertained to deals signed several years earlier for buildings then under construction," Warburg head Frederick Peters wrote in his market report. "For those buyers who have wanted to flip their units after closing on them, the resale market has been less kind."