The sales market’s turbulent year ends with inventory close to peak levels citywide, according to the Q4 2018 StreetEasy Market Reports
Last quarter, the number of homes for sale grew at double-digit rates in all five boroughs for the first time ever. In Manhattan, sales inventory rose 15.4 percent year over year, the fastest annual rate of growth in the fourth quarter since the financial crisis. As a result, fourth-quarter inventory was at its highest level since 2010, according to the Q4 StreetEasy Market Reportsi. Brooklyn and Queens also saw significant annual increases in inventory, up 22.0 percent and 30.8 percent, respectively.
Although the listing of new for-sale homes slowed in the fourth quarter from the record highs reached earlier in the year, total inventory rose as overpriced homes lingered on the market. Homes that were fairly priced, however, sold in a similar timeframe as in 2017. Units that went into contract in Manhattan during the fourth quarter of 2018 spent a median of 86 days on the market, an increase of nine days from the previous year. In Brooklyn, homes took a median of 68 days to sell, down two days from the same period a year earlier. In Queens, homes spent 78 days on the market, just two days longer than in the fourth quarter of 2017.
“The glut of unrealistically priced homes in the city has been a main driver of the slow-moving market that ended 2018 – causing more and more homes to pile up before the new year and heightening competition among sellers,” said StreetEasy Senior Economist Grant Long. “Heading into 2019, sellers who are unwilling to budge on price are going to face an unforgiving market. Many sellers will have to make difficult pricing decisions in early 2019, particularly with another wave of inventory set to hit the market as the home-buying season heats up in the spring.”
See below for additional sales and rental market trends across Manhattan, Brooklyn and Queens.
Q4 2018 Key Findings — Manhattan
- Prices dropped for the fourth consecutive quarter. The StreetEasy Manhattan Price Indexii dropped 3.0 percent to $1,132,214, its lowest level since 2015.
- The Upper West Side saw the lowest number of recorded sales since the financial crisis. There were 405 recorded salesiii in the Upper West Sideiv in the fourth quarter of 2018 – a 23.7 percent annual drop.
- More than a quarter of homes had their price cut. The share of homes with a price cut in Manhattan increased by 4.9 percentage points year over year, reaching 26.8 percent. The median price cut amount remained unchanged, at 5.7 percent of the home’s total price.
- Rents rose in all submarkets. The StreetEasy Manhattan Rent Indexv increased 2.4 percent annually, reaching $3,207. Rents rose the most in Upper Manhattanvi, up 2.4 percent to an all-time high of $2,380.
- The share of units offering rental concessions dropped. In the fourth quarter of 2018, 14.9 percent of rentals in Manhattan offered a concessionvii, down 7.3 percentage points from last year — the largest annual drop since 2010.
Q4 2018 Key Findings — Brooklyn
- Prices rose after dipping briefly in the third quarter. The StreetEasy Brooklyn Price Index increased 2.6 percent annually to $711,578. Prices in South Brooklyn[viii] rose the most, reaching $724,055, an increase of 5.5 percent year-over-year.
- Recorded sales fell to 2012 levels. The number of recorded sales in Brooklyn dropped 18.8 percent annually, matching levels last seen in 2012.
- Homes came off the market two days faster. The median number of days on market dipped to 68 in Brooklyn, down two days from last year. Brooklyn was the only borough where median days on market dipped.
- Rents continued to climb. The StreetEasy Brooklyn Rent Index increased 1.5 percent to $2,584. Rents rose the most in Northwest Brooklyn, increasing 3.3 percent annually to $3,058.
- Only 1 in 10 rentals offered concessions. Concessions were harder to find in Brooklyn, with the share of units offering concessions down 8.7 percentage points from a year prior.
Q4 2018 Key Findings — Queens
- Prices continued to rise. The StreetEasy Queens Price Index increased 5.0 percent to $520,312. Home prices rose in every Queens submarket, led by growth in Central Queens[ix], where prices rose 6.9 percent to $539,006.
- There were more than 1,000 more homes on the market than in the fourth quarter of 2017. Total sales inventory increased 30.8 percent in Queens. Sales inventory jumped the most in Long Island City, on the heels of the Amazon HQ2 announcement — up 45.2 percent annually.
- More Queens sellers offered price cuts. The share of homes with a price cut rose 5.6 percentage points year-over-year to 19.3 percent in the borough. The median price cut amount remained unchanged at 4.5 percent.
- Rents reached an all-time high. The StreetEasy Queens Rent Index increased 2.6 percent annually, reaching $2,164.
- Landlords advertised concessions on fewer units. The share of rentals advertising concessions fell to 9.6 percent in Queens – down 5.6 percentage points annually.
The complete StreetEasy Market Reports for Manhattan, Brooklyn and Queens, with additional neighborhood data and graphics, can be viewed at streeteasy.com/blog/research/market-reports/. Definitions of StreetEasy’s metrics and monthly data from each report can be downloaded at https://streeteasy.com/blog/data-dashboard/.
