An Elliman quarterly report was recently published and it contains some shocking statistics about where the Manhattan residential real estate market currently stands — and, more importantly, where it’s headed. Within the report I found five jaw-dropping statistics I believe all well-informed investors and buyers ought to know. Spoiler alert: Today, Manhattan is truly a buyers’ market, with some of the biggest declines the market has seen since the Great Recession of 2008.

1. In the past three months, the median condo sales price has fallen by 8.1% to $1.48 million, the lowest it’s been in several years.

This decline is a whopping 19.8% lower than the peak prices of Q1 2016. To put this into perspective, condo prices have declined as much from this peak as they did back in 2008-2009 during the Great Recession.  

2. The number of condos sold in the fourth quarter fell from the third quarter by 22.7% and by 13.0% year-over-year, which means that sales volumes are slower than they’ve been in a very long time.

This decline in volume is making sellers very willing to negotiate, which is a big shift from where the market stood two years ago, when bidding wars were more common. Even big developers are sharpening their pencils; for example, Extell Development, which currently has several large new condo projects in the market, was offering rebates of up to three to five years’ worth of common charges for buyers willing to close before December 31.

3. The number of all sales (condos and co-ops) has fallen by 18.6% year-over-year, and 2018 had the lowest levels of annual sales since 2009 during the recession.

Both prices and volume are falling, which means that the only properties selling are the ones that are priced aggressively which is consistent with what we are seeing in the market. For example, we’ve watched sellers who have had their properties for sale for several months through the fall, take the property off the market and then re-list successfully in January at a price 10% lower than the most recent listing price.

4. In the last quarter of 2018, condo sales prices averaged 6.7% less than the original listing price.

A year ago the average discount was 5.9% and in the first quarter of 2016 it was only 2.1%. Again, all signs point to sellers becoming very aggressive with their pricing.  

5. Based on the current sales pace and inventory, it would take 9.5 months to absorb (sell) all the Manhattan homes currently listed for sale.

That’s 58% longer than it was in the fourth quarter of 2016, which means that it takes a lot longer than usual to sell an apartment. Of course, nobody has a crystal ball, but using historical data and technical analysis as a guide, all signs point to a slow year in 2019.

What It All Means For Manhattan

Historically, Manhattan has been one of the last markets to fall and the first to recover, but this cycle things seem to be playing out differently. Other housing markets are just now starting to falter, while Manhattan has been in decline since 2015.

Unlike the housing market implosion that occurred after the subprime crisis in 2008, this slowdown feels more gradual. If you really look at the numbers, the Manhattan market is just as soft as it was then, but without the loud warning signal of bank failures.

A technical analysis of the market provides a less clear-cut prediction since both positive and negative signals abound. On the positive side, bond yields are significantly lower than their November peak, and the Fed’s rate hike in December will likely be their last until the economic data signals an improving economy. But, on the negative side, the stock market has declined steadily since October, and as companies confirm disappointing earnings, the downward trend is expected to continue. Given these conflicting signals, the bottom appears likely to occur over the next three to four quarters.

In addition to watching global central banks and political developments, it pays to keep an eye on China. Since late 2015, their tightening of capital controls and reigning in of credit expansion has reduced the foreign bid in major cities globally — and certainly accounts for some of the decline in Manhattan sales. Indications that Chinese policies are loosening would be an important signal for Manhattan real estate.

The long and short of it is that, for now, it’s a buyer’s market in Manhattan. Although the current residential market looks a little gloomy, the long-term outlook is ever bullish.


Compound is a venture capital-backed asset management firm that creates city-specific residential real estate funds called ReTFs designed for the next generation of investors. Our first fund invests in Manhattan residential real estate, an asset class that has historically been out of reach for the average investor but has outperformed almost every relevant benchmark, including the S&P 500.