The real estate market in Manhattan fell by 25% in the first quarter of the year, compared with the same period last year, following the new federal tax laws, the volatility in the capital market and the flooding of luxury apartments.
Sales in the first quarter posted their biggest decline in a decade, reaching their lowest level in six years. In the quarter, 2,180 sales were sold, compared with 2,892 last year. The prices themselves fell by 8% during the same period last year.
The upper range of the market absorbs the strongest blow – the prices of luxury apartments in Manhattan dropped an average of 15% and sales fell 24% to those apartments.
According to Jonathan Miller, the president of real estate agency Miller Samuel, with so many luxury apartments at particularly high prices, there are many who stand empty for more than a year and a half – a jump of 50 percent over the previous year.
According to Miller, the main problem at the upper end of the market is demand prices. “Many sellers have yet to reflect the changes in tax laws and the general slowdown in the 2014 market and have not cut asset prices, and the next two years will focus on re-pricing,” he said.
“The market is flowing more and more supply, with the construction of luxury towers this year and next year, the supply surplus is likely to worsen before it improves, I believe the decline will continue, but I think it will not be as steep as in the first quarter,” Miller said.