Fourth Quarter 2019 showed some signs of a stabilizing market, as sales moderated, signed contracts improved, and supply growth slowed. Yet such shifts also signal that buyers remain cautious, committing only when a property demonstrates clear value. Prices, in turn, continued to decline, falling to levels last seen in 2014 and 2015, but supporting activity in the Manhattan market in the face of ongoing supply, affordability and tax headwinds. In a market eager for improvement, this quarter’s results provide a constructive yet tentative backdrop heading into what’s sure to be an eventful 2020.
Fourth Quarter 2019 sales fell just 2% annually to 2,717 closings, bringing the 2019 total to 11,660 transactions. Despite a 1% uptick in resale co-op and an 11% boost in new development sales, closings still fell this quarter due to a 13% drop in resale condo sales. Signed contracts, however, were level with 2018 for a third consecutive quarter—improving 1% annually to nearly 2,500 contracts—suggesting that demand, after four years of declines, may finally have stabilized.
Yet the small increase in contracts signed couldn’t keep inventory from climbing. Supply in Manhattan rose for a 17th consecutive quarter this fall, up 5% year-over-year to 7,332 listings, a nine-year high. As inventory grew and prices fell, buyers remained patient, pushing days on market higher by ten days from a year ago to an average of 123 days, a seven-year high.
Unsurprisingly, more supply, a “wait and see” approach to lower prices, and anxious sellers continued to weigh on prices this fall, as did Manhattan’s luxury market, which saw sales over $5M drop 41%. As a result, Fourth Quarter 2019 price figures settled to their lowest year-end levels in five years, with average price falling 11% to $1.832M and median price—less skewed by high or low priced—slipping 3% to $995K to remain below $1M for a second quarter in a row.