Manhattan and Brooklyn Homes Linger on the Market as Buyers Hesitate in January

NEW YORK, Feb. 26, 2016 /PRNewswire/ -- 

Key facts for January 2016:

• Manhattan's yearly price growth has been slowing since December 2012, rising 5.3 percent year-over-year in January to $991,468.
• Brooklyn's monthly price growth has been slowing since July 2015, rising 8.5 percent year-over-year in January to $540,186.
• The East Brooklyn submarket experienced the fastest sales price growth and showed no sign of slowing; the median resale price grew 25.3 percent from January 2015 – the highest annual growth for any submarket tracked by StreetEasy.
• In Manhattan, the median time on market was 90 days, the longest amount of time recorded since January 2013. In Brooklyn, the median time on market was 85 days – an increase of 18 days year-over-year.
• In Manhattan's luxury tier, the median time on market extended to 131 days, due in large part to slowing condo sales.

The Manhattan and Brooklyn real estate markets kicked off the new year in a much less competitive state than in recent years. In a possible sign of buyer fatigue, sales prices across Manhattan and Brooklyn continue to grow, but at a much slower pace than the fever pitch of the past two years, according to the January 2016 StreetEasy® Market Reportsⁱ. Homes also spent significantly more time on the market in January than in recent history, another sign of a softening market.

In January, the median resale price in Manhattan increased 5.3 percent year-over-year to $991,468, the lowest annual growth since December 2012, according to the StreetEasy Price Indicesⁱⁱ. The pace of price growth has slowed for 24 consecutive months (since February 2014), a trend that is expected to continue over the next year. The latest StreetEasy Price Forecast predicts Manhattan prices will grow by 4.1 percent to $1,032,128 by January 2017ⁱⁱⁱ.

Fueling slower price growth is a recent decline among Manhattan homes priced in the top tier of the market. According to a StreetEasy analysis, Manhattan's luxury tier experienced seven consecutive months of price decline after peaking in May 2015 at a median price of $3.27 million^iv. By December 2015, the median price fell 0.3 percent to $3.26 million.

Resale price growth in Brooklyn was higher than Manhattan in January, but the borough is beginning to mirror Manhattan's slowdown, as monthly price growth declined for the seventh consecutive month. The median resale price in Brooklyn grew 8.5 percent from last year to $540,186. Brooklyn price growth was led by the East Brooklyn submarket, where the median resale price grew 25.3 percent year-over-year to $494,564 – the highest annual growth recorded in any submarket in StreetEasy's history. The median resale price in Brooklyn is expected to grow by a much slower 3.7 percent to $560,032 by January 2017, according to the StreetEasy Price Forecast.

"Sales and rent price growth are stabilizing across Manhattan and Brooklyn," says StreetEasy data scientist Alan Lightfeldt. "Sellers in this market may discover that they cannot set prices and expectations high with the anticipation of a quick sale. The market is starting to look more like 2013, a period of stable growth prior to the surge of 2014 and 2015."

Manhattan homes that went into contract in January spent a median of 90 days on the market, the longest recorded since January 2013. In the luxury tier, homes remained on the market for an additional 33 days from last year, reaching a median of 131 days. In Brooklyn, listings spent a median of 85 days on the market, 18 days longer than last January. Condo unit sales were chiefly responsible for lengthening overall time on market, with condos spending a median of 103 days in Brooklyn and 91 days in Manhattan – a yearly increase of 45 and 11 days, respectively. This severity suggests an impetus beyond seasonality and strongly indicates greater hesitation among buyers.

The complete StreetEasy Market Reports for Manhattan and Brooklyn with additional analysis, neighborhood data and graphics can be viewed at streeteasy.com/blog/market-reports.

About StreetEasy:
StreetEasy is New York City's leading local real estate marketplace on mobile and the Web, providing accurate and comprehensive for-sale and for-rent listings from hundreds of real estate brokerages throughout New York City and the major NYC metropolitan area. StreetEasy adds layers of proprietary data and useful search tools to help home shoppers and real estate professionals navigate the complex real estate markets within the five boroughs of New York City, as well as Northern New Jersey and the Hamptons.

Launched in 2006, StreetEasy is based in the Flatiron neighborhood of Manhattan. StreetEasy is owned and operated by Zillow Group (NASDAQ: Z and ZG).

StreetEasy is a registered trademark of Zillow, Inc.

ⁱ The StreetEasy Market Reports are a monthly overview of the Manhattan and Brooklyn sales and rental markets. Every three months, a quarterly analysis is published. The report data is aggregated from public recorded sales and listings data from real estate brokerages that provide comprehensive coverage of Manhattan and Brooklyn, with most metrics dating back to 1995 in Manhattan and 2005 in Brooklyn. The reports are compiled by the StreetEasy Research team. For more information, visit http://streeteasy.com/blog/market-reports/. StreetEasy tracks data for all five boroughs within New York City, but currently only produces reports for Manhattan and Brooklyn.
ⁱⁱ Median resale prices are measured by the StreetEasy Price Indices. Also referred to as the StreetEasy Manhattan Price Index (MPI) and StreetEasy Brooklyn Price Index (BPI), the metrics are monthly indices that track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2005 in Brooklyn. Given this methodology, each Index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Data on sales of homes is sourced from the New York City Department of Finance. Full methodology here: http://streeteasy.com/blog/methodology-streeteasy-price-indices/
ⁱⁱⁱ The Manhattan Price Forecast and the Brooklyn Price Forecast predict the change in resale prices 12 months out from the current reported period. Each forecast incorporates the Price Index for each borough as well as a mix of fundamental market factors including: historical recorded sales price, household income, population, and taxes.
^iv http://streeteasy.com/blog/manhattan-luxury-real-estate-price-declines/

SOURCE StreetEasy

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