Manhattan Apartment Prices Slide in Fourth Quarter

But the year ended not with a bang, but worries over the future of the market. While median apartment prices are up from 2016 to 2017, they began falling toward the end of this year.

The median Manhattan apartment price of $1.08 million in the fourth quarter was up 4.6% compared with the same quarter in 2016. But it fell 9.8% compared with the record it hit in the second quarter of 2017, according to an analysis of city property records by The Wall Street Journal.

Brokers and analysts attributed the slide to an oversupply of expensive apartments in Manhattan, and uncertainty over a major overhaul of the tax code that was signed by President Donald J Trump last week.

Now some analysts said that as buyers understand the implications of tax changes more clearly the Manhattan market could pick up some momentum next year. Of course, all bets are off if there is upheaval in the economy or the financial markets.

Pamela Liebman, the president of the Corcoran Group, a major New York-based brokerage, said that many buyers are convinced that prices peaked in 2017 and have fallen since and may continue to be under pressure.

"We lost a lot of deals in the fourth quarter, while people waited to see the outcome of the tax bill, she said. "Now that the uncertainty is gone they will be able to make a decision."

She said buyers were active but "focused on value and reasonable pricing."

"The good news is there are a lot of buyers who are ready to purchase next year," Ms. Liebman said. "Sellers who don't overshoot the mark should do well."

In 2017, records were set for median prices for both co-ops and condominiums, with the overall median price of a Manhattan apartment setting a record of $1,150,000, up 6.5% from 2016. Median apartment prices have risen every year since 2011, on an annual basis, according analysis by The Wall Street Journal.

The median price of a Manhattan condo was $1.7 million in 2017, up 2.7% compared with 2016, while the median price of a co-op was $800,000, up 3.2%.

The only price decline in 2017 was with new developments. Their median price of $2.6 million was down 0.6% compared with the year before.

The slowing market toward the end of this year also showed up in contract signings at the ultraluxury end of the market. The pace of contract signings for the most expensive apartments priced at $10 million or more slipped during October and November, according to real-estate data and listing site

Noah Rosenblatt, a broker and founder of UrbanDigs said that deal volume for lower-priced segments of the market, especially apartments listed for under $2 million, remained strong.

"I don't think this tax overhaul is going to kill the real-estate market, " Mr. Rosenblatt said. "We already came down at the higher-end price point. A lot of things are priced in and baked in."

Another broker, Donna Olshan, who produces a weekly report on contract signings above $4 million, said that there were worrying signs in the luxury market, including an increase in the average time a listing spent on the market of nearly four months, from about 10 months in 2016 to 14 months this year.

The top sales of 2017 included the sale of three penthouses on the 92nd and 93rd floor at 432 Park Ave., the glass and concrete skyscraper on East 56th Street and Park Avenue, for a total price of $91.1 million.

The second most expensive deal of the year was the $80 million sale of a 40-foot-wide Upper East Side mansion at 12 E. 86th St. Brokers say that sale is due to close before the end of the year.

Tyler Whitman, a broker with Triplemint, said a buyer called him every day about the various versions of the tax bill as it was being negotiated, working through a series of hypothetical examples.

But last week, his buyer finally decided to act, and swooped in to sign a contract for a newly listed three-bedroom co-op, with a terrace in a 1950s beige brick building on the Upper East Side.

"As soon as the final version of the tax bill was proposed, he said we were good to go," Mr. Whitman said.

Write to Josh Barbanel at

(END) Dow Jones Newswires

December 27, 2017 08:14 ET (13:14 GMT)