According to recent reports, New York City luxury apartment sales took quite the hit in 2016. With speculative reports at the beginning of the year calling for a slowdown in luxury apartment sales, the data for the year doesn’t come as much of a surprise to most in the New York real estate business.
A Reduction in Contracts
In 2016, the New York City luxury apartment market saw fewer contracts signed on apartments over $4 million than was experienced over the past few years. While 2015 saw 1,344 such contracts signed, 2016 saw an 18 percent decline to 1,102 contracts. Co-ops experienced the steepest decline in the number that went under contract with a 25 percent drop. Meanwhile, condos represented 76 percent of all contracts signed in 2016. More than half of these were new developments, which comes as little surprise considering that 30 Park Place, 432 Park Avenue and 56 Leonard all began closings in 2016. Interestingly, more than 400 of the contracts that were signed for luxury properties in 2016 were signed solely based off of floorplans.
While the number of contracts for luxury properties was significantly reduced in 2015, the median price for contracts did increase when comparing 2016 to 2015. In fact, they went up from $6,367,820 in 2015 to $8,090,463 in 2016. Furthermore, nearly 50 percent of all luxury sales happened downtown.
Dollars Spent on Luxury Apartments and Houses Fell in 2016
Despite the increase in the median price of luxury property contracts, the total spent on apartments and houses over $4 million fell significantly when comparing 2016 to 2015 figures. While buyers spent $10,738,479,892 on apartments and houses at this price point in 2015, this figure fell to $8,937,866,862 in 2016.
Luxury Homes Taking Longer to Sell
In addition to experiencing a drop in the number of luxury home contracts, the 2016 market also moved far more slowly than the 2015 market. In fact, luxury apartments spent an average of 318 days on the market in 2016. This is a full two months longer than it took to sell a luxury apartment in 2015.
The slowdown in the NYC luxury real estate market is one that experts have been predicting for quite some time. There are a number of buildings that are likely to begin closings in 2017, however, which could give the market a slight uptick in the total dollar amount and the number of contracts signed for the New Year. Among these include more apartments in 30 Park Place as well as closings in high-profile buildings such as Robert A.M. Stern’s 520 Park Avenue and Annabelle Selldorf’s 42 Crosby Street. 111 west 57th Street may also begin closings in 2017.
Of course, how buyers will respond to the luxury listings remains to be seen. According to some experts, developments are still trying to sell their luxury properties at prices that are not appropriate for the current market. Whether or not these prices will have to come down in order to entice buyers will be the story to watch in luxury real estate news for 2017.