Douglas Elliman Real Estate issued a report Thursday that reveals median Manhattan home prices fell below $1 million in the fourth quarter for the first time since 2015. Condo and co-op prices decreased to $999,000, representing a 5.8 percent drop from Q4 of 2017. The average discount from the last list price from those properties that sold, meanwhile, was 6.2 percent—an increase from 5.4 percent a year earlier.
The report says that the increase in inventory of existing homes and new, luxury construction is largely to blame, as buyers now have more room to negotiate and more options. Rising interest rates and changes to federal tax law were also cited as factors.
Crain’s New York has more.
Rising home costs and ballooning student debts have made it increasingly difficult for younger adults to buy their first homes. However, this is not the only issue keeping this group from homeownership. Starter home inventories across the nation are extremely low, and it is now even beginning to stifle acquisition efforts by large rental home companies whose inventory tends to service suburban renters of modest means. Despite their deep pockets, even these firms are having difficulties finding homes to buy.
This shortage has become so severe that some institutional landlords are now beginning to build their own modest homes to expand their inventories.
This is just one business model, however. Other firms who are too cautious to take on development risk are currently waiting until the housing market’s expansion reaches a tipping point, at which point they plan to purchase large packages of recently completed or recently occupied homes at a discount.
The Wall Street Journal has more.
In a Landlords New York Minute – A (Very) Brief Look Around the World
A “No-Deal” Brexit is becoming more likely as the United Kingdom and the European Union remain at odds over a deal to finalize a separation that will take place in less than 100 days, French police have arrested Eric Drouet for organizing an unauthorized “yellow vest” demonstration, Turkey is experiencing a brain drain as President Recep Tayyip Erdogan adopts a more authoritative style of governing, a “flash crash” caused the Turkish lira and the Australian dollar to plummet and the yen to soar, and global stocks (including U.S. markets) had or are having a rough day following the news that Apple will be forced to cut its revenue forecast. The tech giant says that sluggish iPhone sales in China are largely to blame. Robert Kaplan, the chair of the Federal Reserve Bank of Dallas, believes the central bank should wait to raise short-term interest rates in 2019 until market conditions have become less uncertain; President Donald Trump met with Democratic congressional leaders yesterday to discuss ending the government shutdown that has now entered its thirteenth day, but the two sides were unable to resolve their differences; the Trump administration is evidently considering amending “disparate impact” regulations that affect federal rules against discrimination in realms of public life as varied as education and housing; and the president took credit for firing former Secretary of Defense Jim Mattis. A Military Times poll from September found the retired general had an 84 percent approval rating among troops and a 90 percent approval rating among officers. Speaking of high approval ratings (kidding), the de Blasio administration is being criticized for bungling the Fair Fares program that was supposed to go into effect on January 1, the PATH train loses money because it's a piece of public infrastructure and not a business, and Matt Damon bought Brooklyn’s most expensive home for $16.74 million.
NASA’s New Horizons spacecraft sent back images of Ultima Thule, the most distant object ever visited by humans, and it looks like a lopsided peanut or a headless snowman; China’s Chang’e-4 lunar probe touched down on the far side of the moon, which is the first time a nation has successfully landed a vehicle on the part of the moon that never faces the Earth; and NASA will soon send a spacecraft to crash into an asteroid to save us all. Meanwhile, artificial intelligence can now convert brain signals into speech, you can now buy alcoholic water, and “alcohol use disorder” is now a thing.