All Over the Map

Lower Manhattan Apartment Sales Prices Drop, While Local Rents Go Both Ways

TribecaTribeca
A new analysis from an online real estate marketplace, StreetEasy, finds that three Lower Manhattan neighborhoods are among those where market conditions are most favorable to homebuyers, and least advantageous to sellers.

The evaluation, released Thursday by StreetEasy’s senior economist Grant Long, documents that Tribeca is the fifth-most auspicious environment for buyers anywhere in the five boroughs of New York City, while the Financial District ranks seventh. Battery Park City, while not ranked in the top ten most propitious areas for people seeking to purchase (rather than rent) an apartment, is also a fertile ground for buyers.

“With the competition for homes varying around the City, we looked at markets that are best for buyers and sellers, revisiting an analysis from last year,” Mr. Long says. “We tracked time on market, price cuts, and the difference between asking price and selling price to determine the competitiveness of different neighborhoods around the boroughs. Our analysis finds that well-established, higher-priced neighborhoods tend to favor buyers, while more affordable neighborhoods farther from Manhattan favor sellers.”

“To determine New York City neighborhoods where either home buyers or sellers have more negotiating power, StreetEasy created the Buyer/Seller Index,” he explains. “The index combines the sale price-to-list price ratio, the percent of homes with a price cut, and the number of days homes spent on the market. Relative to other neighborhoods in New York, buyer’s markets are identified as those with a higher index value, driven by more price cuts, homes staying on the market longer, and lower sale-price-to-list-price ratios compared to other neighborhoods in our analysis.”

For Tribeca, Mr. Long found, 34.2 percent of all apartments had reduced their asking price, and that the median time on the market was 106 days. The median sale-to-list price ratio in Tribeca was 97.1 percent, meaning that condominium and cooperative units were typically selling for slightly less than their quoted prices. Although this may not sound like the kind of dramatic discount that draws bargain hunters, the benchmark is keyed to the already reduced price being quoted for more than one-third of all listings. For context, it is also worth noting that in markets where sellers have the upper hand, apartments are often sold for higher than their listed asking price, as a result of competing offers being tendered by multiple, prospective buyers. In that scenario, the median sale-to-list price metric tips well above 100 percent.

In the Financial District, 34.7 percent of all apartments offered for sale has discounted the price at which they were initially listed, and the median time on the market was 97 days. The median ratio between final sales prices and listed price in FiDi was 97.5 percent.

Battery Park City’s numbers tell a similar story, with 39.5 percent of all units offered for sale cutting their initial price, and such units spending a median of 68 days being shopped before they were sold. In Battery Park City, the shorter wait times sellers had to endure appear to have translated into smaller discounts. In this community, the median ratio between the price for which an apartment ultimately sold, versus its asking price, was 99.0 percent.

A separate analysis, compiled by StreetEasy in January, found that as median asking prices softened by varying degrees in these three neighborhoods, median asking rents have risen in Battery Park City and the Financial District, but fallen in Tribeca.

In Battery Park City, StreetEasy’s January Market Report indicated that the median asking price for an apartment dropped 32.0 percent from December, 2016 to December, 2017, to $1.395 million. At the same time, the median sales price slumped only slightly, to $1.06 million, a decline of 0.7 percent. During this period, however, the median asking rent in Battery Park City climbed 2.0 percent, to $4,258.

For the Financial District, the median asking price for apartments fell 15.5 percent, to $1,395,000, but the median sales price actually rose 5.1 percent, to $1.2 million. At the same time, the median asking rent for FiDi apartments climbed 4.3 percent, to $3,600.

In Tribeca, the story was similar for sales but different for rentals. In this community, the median asking price for apartments sank 4.8 percent, to $5.237 million, while the median sales price plummeted by 42.4 percent, to $2,425,000. Median asking rents in Tribeca also fell, in this case by 18.0 percent, to $6,495.

Matthew Fenton

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