Prices Are Down 12% in 2018. What Would 2019 Bring?
A colleague who had been in the industry for 20 years said to me she was more bored in 2018 than 2008. Maybe “bored” wasn’t the right word she had intended. Most of us were busier but closed less deals in 2018. Compared to 2017, 20% more listings hit the market but 5% less deals got done in 2018. The average monthly median $/sqft dropped 12% to $1388/sqft from $1580/sqft in 2017 (condo and coop in Manhattan). The peak of this cycle was 2015. Paces slowed down in 2016 and 2017 but the sellers really threw in the towel this year. At 12% down, there was decent support in the market. What would 2019 bring? The market is over-supplied now with the Absorption Rate at a high of almost 10 months. Many sellers are still stuck with the mentality that they couldn’t sell below their neighbors’ print. I believe if every listing was 12% lower, the Absorption Rate would be well below 10 months. I am relieved to bid 2018 goodbye. Equity markets at their lows, government shutdown with no end in sight, the trade dispute, etc. We bear the consequences of our collective actions. But 2018 also ignited great hopes. Hopefully as the law of equilibrium goes, when things are so low, the only way to go is up!
May 2019 bring you prosperity, peace and joy!
The NYC real estate market is at an interesting crossroad. On the one hand, we feel a lot of pent-up demand from buyers who have been watching and waiting for rates to go down.