Next week, the major brokerage firms in New York City will begin reporting sales data for the first quarter of 2019. At Compound, we follow the condo market closely — really closely. Every day, we review which new units have been listed, which units have reduced their prices, and of course, which units have sold. We also speak to brokers and developers all the time, so we hear a constant anecdotal view of the market.

For those of you that can’t wait until next week, we decided to jump the gun and provide some estimates based on what we are seeing. We are also making a bold prediction: that the longest, deepest, downturn in the Manhattan condominium market is coming to an end and that winter 2018–2019 will go down as the bottom of this cycle. That’s not to say that there won’t continue to be opportunity; developers are still struggling to unload inventory, and there are plenty of sellers who aren’t reading this post, but sentiment can change on a dime and once the FOMO kicks in, watch out.

Based upon our data and analysis, we predict the following announcements for the Q1 2019 condominium market:

  1. Douglas Elliman Q4 2018 Report & Douglas Elliman Q1 2018 Report

Average Sales Price: We expect the positive headlines may focus on the rise of Average Sales Price. It’s a big jump both QOQ and YOY and boosted by some ultra luxury closings including Ken Griffin’s record breaking $238 million purchase. Removing this transaction would reduce the average sales price by a couple hundred thousand dollars. This is not a number that we typically focus on, since it tends to be easily distorted.

Average PPSF: The negative headlines might focus on a big drop in average price per square foot both QOQ and YOY. This would mean that despite the high-end purchases, there were significantly more sales on the lower-end of the market.

Median Sales Price: We’ve seen in the past that the average and median price numbers don’t necessarily move in tandem. The average price is far more reliant on the number of high-end new developments that have sold. Since we generally shy away from the ultra high-end, we are much more focused on median pricing which we think we will bounce back in Q1 from a big drop in Q4 2018.

Number of Sales: We expect the number of sales to be down from Q3 2018 and flat YOY. It’s a weak number that we expect to see tick upward in Q2 2019.

Listing Discount: This is one of the most important numbers for us at Compound, and the one we are most focused on. As we previously discussed, with reduced demand, certain sellers are growing desperate and are willing to transact at prices well below ask. We wouldn’t be surprised if this number peaks here in Q1 2019.

And since everyone likes predictions, our final four is Gonzaga, North Carolina, Michigan State, and Virginia, with Gonzaga beating North Carolina in the finals 87–81. Please don’t make any bets based on this; we know Manhattan a lot better than college basketball.