This week, the Douglas Elliman Q1 2019 quarterly report was released, 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, we found three jaw-dropping statistics we believe all well-informed investors and buyers ought to know. Spoiler alert: Today, Manhattan is truly a buyers’ market and is in the longest and deepest downturn in three decades.

1. Sales volume fell again. The number of condos sold in the first quarter fell from the fourth quarter by 16.1% and by 9.7% year-over-year, which means that that sales volume is slower than it has 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 three years ago, when bidding wars were more common.

2. Discounts are even bigger. In the first quarter of 2019, condo sales prices averaged 8.2% less than the original listing price.

A year ago the average discount was 4.3% and in the first quarter of 2016 it was only 2.1%. Again, all signs point to a buyers’ market.  

3. Inventory is piling up. Based on the current sales pace and inventory, it would take 12.3 months to absorb (sell) all the Manhattan condominium units currently listed for sale.

That’s 30% longer than it was in the fourth quarter of 2018, which means that supply continues to outpace demand.

What does it all mean 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 yieldsare 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.

The long and short of it is that, for now, it’s a buyers’ market in Manhattan.