Sellers Conceding the Market in New York

December 7, 2018
New York City street
Photo: Unsplash/Robert Bye

In New York's luxury real estate market, the scales have tipped in buyers' favor as sellers cut prices and add enticements like pop-up yoga classes and financial incentives.

Luxury developers are innovating to increase sales, either by working with tech startups to flip unleased rental units for extended stay residents, repurposing units into flex space for amenities, or delaying listing properties until the market sweetens in their favor. The New York Times reports that Manhattan's for-sale market is softening, with third quarter resales, accounting for 85 percent of overall sales, spending 11 percent longer on the market year-over-year. The median sales price dropped 4.5 percent in that time.

“It feels worse when you’re out in the trenches,” said Donna Olshan, the president of Olshan Realty, which puts out a weekly report on contracts signed on properties seeking $4 million and up. That segment has taken an average of 441 days to go into contract so far in 2018, the longest stretch since at least 2013, when similar homes spent 172 days on the market. Through Dec. 2, $4 million-plus homes were reduced on average by 9 percent before a contract was signed, but Ms. Olshan believes that after sellers make additional concessions, the actual discount is closer to 15 or 20 percent.

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