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Manhattan Luxury Real Estate Sales Declined in 2016, Report Says

By Danielle Tcholakian | December 26, 2016 12:41pm
 432 Park Ave. is the tallest building on the East Side.
432 Park Ave. is the tallest building on the East Side.
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DNAinfo/Shaye Weaver

MANHATTAN — Luxury real estate sales in Manhattan dropped 18 percent in 2016, according to realtor Donna Olshan's year-end market report.

Olshan, who releases a weekly report on contracts over $4 million, said the numbers for such sales were still higher in 2016 than in 2012, but reflect a drop from the "golden years of condo development" that spanned 2013 through 2015. 

"The decline reflects classic price resistance," Olshan said in the report, noting that average asking prices were up by 2 percent, but properties languished on the market for more than two months longer in 2016 as compared to 2015 — an increase of 30 percent.

Asking prices dropped an average of 6 percent by the time contracts were signed, compared to an average drop of 5 percent in 2015, according to Olshan's report. 

Both she and other top real estate firms noted that co-ops appeared to be getting markedly less popular than condos when it comes to luxury apartments, and that Downtown is winning out, compared to the Upper East and West sides.

Seventy-six percent of all apartments that sold for $4 million or more in 2016 were condos, according to Olshan — with 25 percent fewer co-ops sold for $4 million or more this year compared to last year.

Data from the real estate firm Stribling found a co-op slowdown when looking at sales priced $5 million and higher in the second half of the year (July 1 through Nov. 15) compared with the same period in 2015.

For instance, in the ultra-high end market above $20 million, there were no co-op sales in the second half of 2016, the firm found. During the same period in 2015, there were eight.

While there were 20 percent fewer co-op sales at $5 million or more in Manhattan overall, some neighborhoods saw even greater declines, like a 40 percent drop in Upper West Side co-ops, according to Stribling.

But as with Olshan, Stribling's report showed that condo sales at $5 million or more went up: an increase of 38 percent in the second half of 2016 compared to the same time in 2015. 

Olshan said the apparent preference for condos over co-ops shows "a continuing market shift in the luxury market to new condos that offer freedom of ownership, new infrastructure, robust amenities, and some hip architecture — particularly seen Downtown."

Of the 990 co-ops and condos sold in Manhattan at $4 million or more, more than half were Downtown, according to Olshan's report.

Stribling Private Brokerage Director Kirk Henckels, who authored his firm's report, agreed, attributing the preference for Downtown condos to buyers turned off by "lengthy board vetting processes" in the co-op world.

According to Olshan's report, last week's top sale was at 432 Park Ave., the controversial skyscraper in Midtown East, reputed to be the Western Hemisphere's tallest residential building. 

The unit sold was on the 43rd floor and had an asking price of $17.625 million. It was the seventh time this year that the building has taken the top spot in Olshan's report, she said.

According to The Real Deal, the top three priciest apartment sales this year were at 432 Park Ave., with the top sale being a unit on the 96th floor that went for $87.7 million.