Most reports of how we fared in 2015 won’t come out until mid to end-January as people busily crunch numbers after December’s data gets released. We couldn’t wait until 2016, so we thought we’d do a pre-analysis, so to speak, to give you a sneak peak into how the year fared. All of the numbers below refer to year-on-year comparisons, to get the best sense of an annual state of the market.
Looking at supply, in other words the inventory available, we can see that condo supply inched up 6.2% to 2,268 properties, while co-op supply dropped by 3.1% from this time last year to 1,908 properties available for sale during the year.
While these numbers are nothing to write home about in their own right, breaking down the statistics into apartment size tells a different story: studios inventory was down 3.9%, 1-bedroom inventory increased by 2.8%, while 2-bedrooms jumped dramatically in availability by 18.7%. Our hypothesis is that during the softer years of the NYC rebound, those apartments that were put on the market were those smaller studios and 1-bedrooms as they were cheaper and more liquid. As the market heated up, the relative gains of the larger apartments caught up and incentivized sellers to list. (Mind you, we’re still near the lows of inventory here).
The demand, or contract signed picture below, looks very different. Overall condo sales are down 36.6% year-on-year while co-ops are down 32.6%. Keep in mind that last year was the first year we didn’t see any seasonal dip in sales, an anomalous year to be sure. That said, you can see that demand is lower than even in 2013. Breaking things down by apartment size doesn’t change the message: studio sales were down 30.1%, 1-bedrooms down 28.1%, and 2-bedrooms down 31.6%.
Price per square foot and median prices:
You would think, therefore, that with demand dropping by 1/3 and supply more or less even, prices suffered, right? Economics 101. Not so! Price per square foot has gone up: 10.1% for condos to $1,476 and 7.9% for co-ops reaching $971. Similarly, median sales prices have also seen growth of 9% for condos reaching $1.45 M and 4.5% for co-ops reaching $740,000.
What’s going on here? This is called market normalization during a time of continuing low inventory. Real estate was still in demand, but not in a frenzied, bubble-like state (what we’ve been stating all along, may we add). This is precisely why we don’t believe that prices will suffer during what we describe as “a breather” in the current market (we will discuss this topic later this week).
Sales over asking price:
The percentage paid over asking prices tell a very similar picture: activity has slowed down but prices are still inching up. Year on year, 35% of properties went for above asking versus 28% last year. Understandably, therefore, 50% of properties sold for below asking, versus 59% this time last year. It’s still good to be a seller.
Source: Graphs from PropertyShark