MANHATTAN — Buyers and renters, take heart: Yes, New York is still outrageously expensive, but you might finally have some room to negotiate prices.
The second quarter marked the return of “buyer leverage,” with an uptick in price drops, many experts said.
For renters, there’s also been a little relief, as more units are being offered at discounted rates.
Though the Manhattan median sale price hit a record in the second quarter, rising about 13 percent from a year ago to about $1.11 million, this was largely due to closings from new high-end development on contracts signed at least a year ago, according to a Douglas Elliman report released Friday.
In what is perhaps a more accurate gauge of the market’s temperature, Elliman report author Jonathan Miller noted that the percentage of homes selling for over their asking price dropped to 16 percent, which was the lowest in three years.
With expanding inventory, he expected the number of sales fetching more than their asking prices would continue falling.
“After chasing the market up,” Frederick Peters, CEO of Warburg Realty wrote in his market review of second quarter of sales data, “buyers finally felt re-empowered in the past three months.”
While properties below $2 million are still in high demand, the overall tenor of the market seemed to shift this spring, he said, as price reductions and “aggressive negotiating” from buyers returned to the forefront. Peters also noted an uptick in bidding competition after prices on listings were chopped.
In the past few weeks, he's seen several listings where owners finally agree to drop prices after their homes lingered on the market for months — and then the offers came streaming in within a couple of days, often at the new asking price.
“It doesn’t have to be an enormous reduction, just big enough so a different constituency of buyers will find it online,” Peters said. “What’s so interesting about this behavior is that these buyers could easily have offered this price and been successful during the months the property was priced higher and engendered no activity. But they didn't. Buyers won’t bid if they don’t see value at the asking price.”
Though sellers often tell their brokers that they don’t want to reduce their price but are open to offers that are less than the asking price, they rarely see such offers come in.
“Buyers need the clear value proposition right there in front of them if they are to engage,” Peters added.
But the ball isn’t totally in buyers’ courts, noted Douglas Elliman’s Dottie Herman.
“You’re not seeing a buyers’ market or a sellers’ market but a pretty well-balanced market,” she said.
But an uptick in inventory has lead to a “leveling off” of prices, she added.
Prices over the next 12 months in Manhattan are expected to rise about 1.2 percent, according to a report from real estate search engine StreetEasy. That’s down from 2.8 percent growth over the past year.
In Manhattan’s rental market — where the median increased 2.3 percent over the past year to $3,280 a month — units spent more time on the market in May, Streeteasy found.
The number of days on market increased from 21 to 24, year-over-year, with TriBeCa seeing the biggest jump, from 31 days to 65 days.
Rentals moved most quickly in Gowanus, where units spent a median of just nine days on the market in May.
The number of discounts also increased, from 28.7 percent of units to 30.4 percent.
“New York renters have grown accustomed to arriving at open houses with their checkbooks in hand, for fear of losing out on a property,” said StreetEasy economist Krishna Rao. “Now, in the face of record-high prices, renters are pausing to weigh their options, easing urgency for summer shoppers in both boroughs.”