Nerves tested as luxe market again loses footing While optimism was in the air earlier this year, brokers are feeling jitters as the high end sees deals drag and prices drop
From the November issue: This past spring, Stribling Associates broker Charlotte Van Doren landed an exclusive on a four-bedroom condo on East 57th Street and listed it for just shy of $5 million. Within 48 hours, buyers were making offers, and six days after going live, the property went into contract for $200,000 over the ask.
But now a very different scenario is playing out in the same building — with the same broker, just one flight up. Encouraged by their neighbor’s success, the owner of an identical apartment set its price at an aggressive $5.6 million. After several weeks on the market, however, there have been few showings and no offers, Van Doren said.
Unfortunately for brokers working in Manhattan’s residential luxury market — especially on the very high end — that story is not unique. While optimism in the sector was strong during the “frothy” spring market, sales are now dragging out and brokers are decidedly more anxious.
“[Brokers] are talking about how hard it is to get a deal done in a market that many perceive is declining,” said Douglas Elliman’s Sabrina Saltiel, who’s marketing an $82 million apartment at 432 Park Avenue. “Getting people to feel secure enough to pull the trigger and not feel they are catching a falling knife is difficult.”
After a rocky 2016, the industry had high hopes for 2017. And the start of the year did indeed seem promising. But things began changing just after the year’s midpoint.
The luxury market logged its worst summer in terms of the number of contracts signed since 2012, according to data from Olshan Realty. While luxury contracts are now starting to edge back up, the sector is still seeing lingering properties, slow absorption and a glut of new product that is getting worse — not better.
Sources said that despite a recent spate of high-profile deals — a contract on Grammy Award winner Sting’s $50 million duplex at 15 Central Park West and the $51 million penthouse contract at Ian Schrager’s 160 Leroy Street, to name a few — the challenges for the high-end market are very real, especially for new developments.
Simply put, Van Doren said: “Buyers have a lot of choices. They feel a sense of control.”
At this time last year, brokers were blaming the election for the lackluster number of contracts being inked.
An internal survey at the Corcoran Group in the lead-up to the presidential election found that around 40 percent of the firm’s brokers had a client waiting until after the election to move on a purchase.
But now — exactly one year post-election — things are not looking up.
Between June 26 and Sept. 3, the number of contracts priced at $4 million-plus declined by 14 percent, to 158, from the same time last year, Olshan Realty found. That drop was even more pronounced for new condo contracts of $4 million-plus. Those fell by a massive 37 percent year over year.
Stribling’s Kirk Henckels said the $5 million-plus category is “basically treading water.”
“[For buyers] it feels like the apocalypse. You have Trump, North Korea and natural disasters who knows what the heck is going on,” he said.
Elliman’s Richard Steinberg — who put a $16.3 million co-op at 550 Park Aven上海千花网龙凤论坛