No one expects Manhattan luxury homes to be cheap; they wouldn’t be luxury then. But these homes, which make up the top 20% of the market, have seen their prices fall to the lowest level since 2013. According to the final 2019 StreetEasy Market Report, homes had to be priced at or above $3.8 million to qualify as luxury—a 6.1% drop from the top threshold in the previous year.
This drop in the luxury threshold indicates that many sellers have finally begun to accept lower prices in order to stand out amid the growing surplus of high-end homes. Even as price levels fell in the fourth quarter, luxury inventory expanded 12.2% over the previous year, with 4,354 homes for sale above the $3.8 million threshold.
Market dynamics in 2020 will continue to favor the buyer across all price tiers, and many sellers will have to face the fact that if they want to sell, it may very well be for less than their initial asking price. Manhattan’s average home prices fell 3.7% to $1,086,217, according to the StreetEasy Manhattan Price Index. Meanwhile, total sales inventory rose 3%, and homes lingered on the market for 96 days, 10 more than 2018. Prospective Manhattan buyers are still in the driver’s seat, with significant negotiating power and a huge inventory of homes to choose from.
At the other end of the spectrum, Queens remains a great option for buyers seeking relative affordability in the city. Fourth-quarter prices stayed unchanged from a year prior, at $509,202. Buyers also had more inventory to choose from than a year earlier, with total inventory growing 1.2% to 4,308 homes.
For the non-buyer, rents in Brooklyn continue to rise at a record pace as shown in the StreetEasy Rent Index. It jumped 5.2% annually in the fourth quarter, its biggest leap in six years. North Brooklyn led with the highest growth in rents (up 5.9% to $3,238), as the area rebounds from the long-planned but suddenly canceled L train shutdown.
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