New York City real estate is still going strong in sales even with such high prices. However, luxury real estate in the Big Apple might just become more affordable.
Brokers claim that bidding wars occur less often now, and only a few open houses get many viewers and potential home buyers. Although they're still pretty hefty, prices are also decreasing, especially for luxury real estate.
"I have seen more broker incentives and price reductions in the last few months than I've seen in the last three years combined," said Leonard Steinberg, president of the brokerage firm Compass.
He continued, "The market got carried away with itself in the first half of 2015. Some people went in with crazy pricing expectations."
As it turns out, New York City experienced a massive price drop in its home inventory by the end of the year. The New York Times reports:
"In the last four months of 2015, about 1,040 available listing in Manhattan cut their asking prices, said Bennett Rosnick, an analyst at Compass. That's 20 percent of the roughly 5,120 properties on the market then, up from nearly 10 percent during the same period of the previous year, when about 520 properties out of some 5,380 available listings had price cuts."
There have been several listings that had cut price cuts - from a $150,000 price reduction of a $1.4 million one-bedroom unit in 280 Park Avenue South, to a $7 million decrease for a five-bedroom unit at 110 Central Park South, which is now seeking $17.995 million.
However, in spite of the price cuts, there were only a number of really good bargains. Apparently, majority of the price cuts are coming from homes that were priced too high anyway.
"This is never a market for overpriced listings," said Brown Harris Stevens president Hall F. Willkie. "If you haven't had offers or are not getting the proper amount of showings, the market is telling you there is no interest, and you have to reduce the price."