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Bidding Wars Ease as Manhattan's Real Estate Market Slows Down: Report

By Kathleen Culliton | October 4, 2016 1:52pm

MANHATTAN — Manhattan’s real estate market continued to slow as fewer apartments were sold, according to report released Tuesday looking at sales data from the third quarter of 2016.

The number of sales in Manhattan dropped 20 percent from a year ago to 2,608, according to the analysis from Douglas Elliman. Though that number was still about 19 percent above the decade quarterly average — indicating that the market was still fairly active — it does point to a bit of a pause after last year's buying frenzy.

The median price also reflected the cool down: re-sale apartments increased just 2.6 percent over the past year, to $950,000.

“The third quarter report reflected the shift in the market from white-hot conditions from the last couple of years to a market that continues to be active but not at a record pace,” said the report's author Jonathan Miller. “We’ve transitioned from an irrational market to one that is more sustainable.”

Buyers gained a slight advantage as the number of bidding wars decreased while the median number of days a unit remained on the market stretched longer from 67 in the third quarter of 2015 to 72 in the third quarter of 2016.

And bidding wars — which cause buyers to pay above the market price and represented a record-breaking 31 percent all sales one year ago — dropped to about 17 percent of Manhattan's market.

Still, the percentage of bidding wars represented a much higher percentage than the national average which rests between 5 and 10 percent.

And though the sale trends represented improved circumstances for buyers, the market is still recovering from a period of irrational and distorted pricing.

Sales prices still broke records: average sales prices in the luxury market rose nearly 21 percent to about $8.84 million, and the price per square foot for condos rose about 18 percent to $2,133.

“I don’t think this suggests an imminent wave of newfound affordability,”  said Miller. “It’s still not the situation I think many buyers would like to see.”