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For much of the year, Manhattan’s market for smaller condos and apartments was gaining steam even as more expensive properties sat on the market.
But in June, more of these less expensive staples of the New York City lifestyle were going unsold as well, according to the latest market report compiled by Coldwell Banker Warburg, a real estate brokerage.
And even though UrbanDigs numbers show the highest-priced Manhattan properties continuing to sit on the market for something like four months on average before selling, there have still been a decent share of luxury transactions to go around, according to the Olshan Luxury Report.
For many brokerages, that luxury revenue just hasn’t been enough to offset the loss of revenue from sales in the lower price tier, President Frederick Warburg Peters wrote in the Coldwell Banker Warburg report.
“As to the greater numbers reported by Donna Olshan, those reflect, more than anything else, seller price capitulation,” Peters wrote. “Everything is salable when the price appropriately reflects the marketplace.”
Chart from Coldwell Banker Warburg report
Overall, the Manhattan real estate market has been highly volatile this year, Peters said — a trend to which the recent uptick in mortgage rates over the past month has almost surely contributed.
But Peters said rising labor costs are also contributing to the problem. Labor and taxes now combine for more than half what co-op and condo owners pay each month, he wrote. And maintenance costs have been rising substantially, making owning units a less attractive prospect.
“[Condo] carrying costs, stripped as they now are of tax abatements, can easily run $15,000 or $18,000 or even $20,000 per month for a nice 2,000-square-foot unit with good light,” Peters wrote.
But just because owning is such an expensive prospect at the moment in Manhattan doesn’t mean renting is much easier.
“Very limited supply combined with enormous demand makes almost every rental costing $5,000 or less a hot commodity; such a place is likely to rent in a matter of days, often with multiple bids,” Peters wrote.
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Correction: An earlier version of this article misstated Peters’ title with Coldwell Banker Warburg. He is the brokerage’s president.
