The new federal tax law and rising mortgage rates were among the factors that contributed to the decline of Manhattan co-op and condo sales year-over-year during the first quarter of 2018, according to the latest report released on Tuesday by real estate firm Douglas Elliman

According to Elliman's findings, the number of closed residential (both condo and co-op) sales in Manhattan for the first quarter of this year was 2,180, a drop of 24.6 percent from the same period last year. That represented the lowest sales quarter in over six years, and the biggest yearly decline in nine years, said Elliman. The average sales price dipped 8.1 percent to $1,933,198 year-over-year as well, while the median sales price fell 2 percent to $1,077,500. Overall inventory rose 4.4 percent.

“With falling sales and rising inventory, the pace of the market slowed,” said the report.

For Manhattan co-ops, the number of closed sales dropped 16.6 percent to 1,232, compared to the first quarter of 2017. The median sales price was $810,000, a gain of 4.5 percent, while the average sales price rose 9.6 percent to $1,361,409.

Condos in Manhattan have seen declines in average sales price, median sales price, and the number sales in first quarter 2018. About 948 properties were sold, a drop of 33 percent year-over-year. The median sales price fell about 1.3 percent to $1,628,279, and the average sales price plummeted by 10.9 percent to $2,676,281.

Elliman explained in its report that uncertainty of the new federal tax legislation that was passed late last year as well as an increase in mortgage rates led to a slowdown among buyers and sellers.

“What we are currently witnessing is both buyers and sellers trying to get comfortable with new external factors challenging the housing market,” Steven James, CEO of New York City, Douglas Elliman, said in a press statement. “We view this, however, as a good time to re-assess values, an opening of new opportunities for buyers and ultimately the creation of a healthier market.”

Jonathan Miller of Miller Samuel Inc., who authored the report, said in the same press statement that the concept to think about is ““price discovery” where it will take the next year or two for buyers and sellers to get reacquainted with what the right values are. I think “uncertainty” makes the market feel weaker than it actually is - but like any big shift, buyers and sellers have to get used to the new market and the new tax law has been the catalyst for this change in sentiment about the market.”

To read Elliman's full report, click on this link. 

David Chiu is an associate editor at The Cooperator.