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Manhattan Q4 2016 Market Report

I'm pleased to share Compass' 4Q16 Manhattan Market Report. This report highlights the prevailing trends shaping the market from this past quarter and provides a glimpse into the research and data analytics in which Compass prides itself.

Highlighting a few trends:

- The total number of closings in the fourth quarter (1,987) was down 36% compared to last year. However, the 2,502 contracts signed in 4Q16 represented a more modest decline of 7% due to a noticeable uptick in contract activity following the presidential election. In the four weeks leadings up to the election, 677 contracts were signed (-33% Y-o-Y) with 44 contracts signed above $5M (-44% Y-o-Y), but in the four weeks following the election 837 contracts were signed (-5% Y-o-Y) with 60 contracts signed above $5M (-12% Y-oY). When considering these figures, it is important to remember the lag time between contract signing and closing date as well as the clustered closing schedules of new development condominiums, which make up a variable percentage of the market.

- Luxury inventory continues to be disconnected from the demands of the market as inventory priced above $3M made up 29% of total inventory, but only 15% of total contracts signed. Notably, condo inventory priced between $3M-$5M increased by 32% which added choices for buyers and reduced urgency. Co-op inventory is limited (47% of total inventory) and demand is high (55% of contracts signed) as the relative price differential between ownership types pushes buyers toward co-ops.

- Asking prices for condos continue to rise, as 4Q16 yielded another record-high median asking price of $2.4M, which was 7% higher than 4Q15 and 34% higher than the median condo closing price of $1.8M. Although closings were down year-over-year, median closing prices for condos and co-ops increased by 3% and 9%, respectively. As as a result, overall sales volume for the year was down just 3% from $25.2B in 2015 to $24.4B in 2016.

- The luxury market, although more muted and widely reported on this year, experienced several notable transactions which both signed and closed in 2016, such as two sales above $60M at 432 Park Avenue, including New York's most expensive sale this year for $88M, as well as sales above $40M at One57, Baccarat Hotel & Residences, and 4 East 66th Street.

Median Closing Price for 4Q2016 by Neighborhoods
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