Sorry to disappoint the buyers who are banking on a buyer’s market across all price ranges in 2017 but that is pretty unlikely. I think you will see the market in the super luxury segment continue to see increased days on market and more negotiation of prices. Nearly every real estate blog or national newspaper chronicles the price reductions that have befallen the super luxury market which in Manhattan starts at around $6 million and up. That trend will continue but now what will happen is that less product will come online to compete with what’s already there. Developers are either shelving or delaying the launch of the sales of their apartments or can not go forward due to finance issues. Financing new development rightfully so has become very difficult. So the super luxury market will see increased days on market and more negotiation of prices. This is and has been a buyer’s market.
$3 million and under still continues to sell well and this will not be affected by increased inventory because there were very few new developments or conversions of buildings with apartments in this price point. The few that aimed for this affordable luxury market have been and will continue to sell well.
What about $3 million to $ 6 million? Well that is where it gets interesting. The property needs to be priced right to be able to sell. Here you could see days on market increase but it all depends on the product. A 2000 square apartment in a new development close to Riverside Park will be in demand and if the building has a tax abatement like 1 west end avenue or 50 Riverside boulevard or the buildings coming to Waterline square aka Riverside Center, it will sell. Whereas, a $4 million Harlem townhouse may linger on the market for a while depending on the condition and if it’s in a historic district. The same can be said a $5 million apartment in NoMad. Value will be key to this segment. If the value is not there, buyers will hold off as they can feel the scales tipping in their favor.
So in 2017, I think we are going to see a continued tale of different segments of the market going in different directions. Super luxury more days on the market and price negotiations will be the norm. Affordable luxury will continue to the market’s sweet spot and will sell. The in between market will be up for grabs and have a little element of both market segments. What is your forecast for Manhattan’s residential real estate market for 2017?