Luxury Apartments Sales Over $5 Million Fell by 31%

Some most most expensive New York City condos fell quite a bit in the first half of the year according to WSJ, as many sellers are now adjusting to cutting asking prices to make the deals go through, a NYC brokers said.

“This is simply a market that is adjusting itself to chronic overpricing relative to buyers’ perception of value,” said Kirk Henckels, a broker at Stribling & Associates, a New York-based brokerage.

It appears that most affected sales were priced at $5 million or more that fell by 31% during the first half of 2018, compared to the same period in year 2017, according to a luxury market report by Stribling. via marketwatch.com

The majority was concentrated mostly in condominiums, including newer developments such buildings, where the supply of high end apartments has sky rocketed, the report found.

“The contracts that are getting done in the luxury end of the market are the result of sellers capitulating to reality,” said Donna Olshan, a broker who tracks contract activity for high-end luxury apartments. via marketwatch.com

Luxury apartment prices went up sharply in years 2014 and 2015, but have since stabilized at lower price levels.

For example a five-bedroom penthouse in a new building with a terrace and high ceilings at 11 North Moore St in Tribeca sold for $20 million. It was listed in January of 2014 and has had three prices reductions since then until the final closing.

Is this the new trend for other real estate markets or just price correction or inventory piling up?