Roughly 12.6 percent of apartments sold for above their listed price in the fourth quarter of 2016, according to the report. That's half as many apartments seeing multiple bids from the same time the previous year.
“It’s a great thing for the sustainability of the market,” said real estate expert Jonathan Miller, who authored the Elliman report and has been tracking such data since 2008.
The decline in bidding wars, which peaked in the third quarter of 2015, means that buyers are gaining leverage.
In a “balanced” market, with stable pricing and buyers and sellers having equal power, roughly 5 to 10 percent of listings sell above the asking price, Miller said.
Drilling down into the data, bidding wars were less common for pricier markets.
New developments, for instance, saw no bidding wars.
The luxury market only saw 2 percent of listings sell for above the asking price and 5.4 percent of condos sold over the list price.
Meanwhile, bidding wars were more common in co-ops, which tend to be less expensive. Nearly 19 percent of co-ops sold for more than the asking price, Miller pointed out.
Frederick Peters, CEO of Warburg Realty, believes the market began shifting from a seller’s market to a buyer’s market in July.
“Increasingly, as the year went by, buyers possessed the upper hand; they balked at overpricing and waited sellers out,” he wrote in his own market report.
“On the listing side, 2016 was a year of price drops, often multiple, to position the subject properties for sale in the changed marketplace," he continued. "While the year began with sellers firmly in charge of the market, December saw almost every sale negotiated, often from prices which had already been reduced several times.”
The median sales price — representing the midpoint of the market — declined 8.7 percent over the past year to $1.05 million, according to the Elliman report.
The price decline, however, didn’t reflect a significant dip in prices per se, rather it reflected the fact that lower-priced “entry-level” units — meaning studios and one-bedrooms — made up the lion’s share of sales last quarter at roughly 46 percent, Miller explained.
“There’s a lot more action at the lower end of the market. This is not a new trend, but it is a little more extreme,” he said.
These smaller, lower priced apartments also sold much faster, he added.
And studio prices were the only to show double-digit growth, jumping more than 24 percent over the past year to $523,250.
“Smaller apartments drove real estate markets in every borough throughout the year,” Peters wrote.
One- and two-bedroom units, priced under $2 million, he found, outperformed all other types of apartments in terms of volume and sales prices across the city.
"These smaller homes experienced enormous demand with which supply could not keep up," he wrote.
That’s why bidding wars haven’t entirely gone away.
While the median price in Manhattan declined overall, the average sales price still hit a record high, reaching $2.098 million. It was up nearly 8 percent over the past year, according to Elliman data.
But Miller didn’t believe this accurately reflected the current state of the market since these sales included contracts that were signed a year or two ago in ultra-luxury new developments, but only closed last quarter when buildings were completed.
These “legacy” contracts, as he calls them, propped up the prices. More recently, some luxury developments have been dropping prices, he added.
“When a market like the super-luxury market is quiet, it’s not that the demand is gone, it’s that the demand at prices set at 2014 is not there,” Miller said.
As new developments drop prices, there is a trickle-down effect on the rest of the market — though not as much on the lower end.
“It’s like a layer cake. When the top layer is melting, it melts into the next layer,” Miller said. “But the further you move away from the high end, the less of an effect you see.”
Still, many brokers said they noticed a surge of deals after the presidential election, following a period of “uncertainty” that kept some buyers on the sidelines.
Discounts on new development also helped spur sales.
Downtown neighborhoods south of 14th Street were busiest for sales, according to a report from Halstead Property.
Downtown had the largest share of new development closings, accounting for more than 34 percent of sales in the fourth quarter.
That area also had the highest percentage of re-sales in Manhattan, with 20 percent of activity, followed closely by the East Side, the Halstead report found.
Dottie Herman, president and CEO of Douglas Elliman, believes that Millennials will be the big drivers of the market in 2017, vying for the limited inventory in the lower priced properties.
“They waited to get married and have kids and to move out of the house — and they believe in home ownership,” Herman said.