Speculation, politics, and regulation fueled the Manhattan market, leading many to anticipate a vastly different residential sales landscape on the horizon. Instead, our data indicates an interesting, yet oddly typical second quarter.
Declining sales seen in the first part of the year have turned to moderate growth with from the first quarter, and 7% higher than second quarter last year. The total number of sales this year to date is on pace with the first half of 2018, down only 1% year over-year. The number of contracts signed increased as expected based on recorded sales, with 3,196 contracts signed, up 29% from the first quarter and 3% from this time last year.
While this marks a positive trend, other metrics of the market paint a landscape that will require close observation and strategy in the second half of the year. Properties spent a notably higher time on the market this quarter at an average of 168 days, up from last quarter’s peak. In addition, the average price slumped 5.8% for sales and 9.3% for contracts with an average 8% discount, up 1% from this quarter last year. Inventory climbed 7% from the first quarter as well, many of which are smaller in size on average.
It is clear Manhattan is seeing more buyers, but those buyers have more options and are taking longer to make decisions. The new mansion tax taking effect July 1, 2019, drove some activity, evidenced by a slight increase in contracts in June, but most buyers remained patient. How this tax truly impacts the market will be seen in the coming months.
With the upcoming election cycle in the United States, it is likely speculation, politics, and regulation will only grow, and objective observation of the market will be crucial.
We anticipate deals to continue taking longer than usual but also expect the increased sales and contract activity to persist as we move into the heart of summer.