Welcome to the Twenties
Julia Hoagland
20-year NYC residential real estate veteran. My team closed hundreds of deals and over $1B in transaction volume. I now connect buyers and sellers with expert agents in New York City, across the US and around the world.
Multiple levels of uncertainty and two major tax changes weighed on 2019.
Uncertainty causes fear and arrests execution. With the partial China and USMCA trade deals, and additional clarity on Brexit, uncertainty has partially subsided. The upcoming November presidential election and the overdue recession still loom.
Following the reduction of state and local tax deductions imposed in 2018, in 2019 NY increased mansion and transfer taxes on $2M+ sales. Tax changes are non-negotiable: 2019 was the year of their absorption.
Buyers in large part had the upper hand; sellers transacted when choosing price over patience. Year-over-year statistics show some signs of submarket stability:
- Sales volume is 1.2% lower overall, but 1.6% higher under $5M; sales above $5M fell 37.6%
- Manhattan is a statistically balanced market with 7.6 months of inventory (6-9 months is balanced)
- Median new development sales price was up 2.1%
- Average discount to last asking price is down 9% to 6.2%; 6% of sales were above ask
When markets are going down, the natural tendency is to step back, but assuming one believes in the asset class, it’s actually the best time to jump in. One has maximum choice and benefits from the negotiating leverage afforded when alone at the negotiating table. Paraphrasing Warren Buffet “be greedy when others are fearful”.
Source: Manhattan Brokerage Fourth Quarter 2019 Market Reports
Contract Signed: 130 East 94th Street, 3D