The bid-ask spread for Upper West Side townhouses hit a record low this month at 12.7%. The consistent tightening of the bid-ask spread over the last year-and-a-half is mainly a reflection of asking prices continuing to drop, while average sales prices remain flat. The graph below illustrates the sharp downward trend in bid-ask spread over the last year.
According to this Streeteasy report, fewer than half of the homes that hit the market in the spring of 2018 actually sold, which explains the number of price drops that have occurred over the last year. While sales volume is down year-over-year, (there were 4 sales over the last 2 months compared to 12 in January and February of 2018), average sales price remains relatively flat year-over-year. As on-market prices continue to drop, the spread between average asking prices and the average sales prices are tightening. Given the drops in asking prices, we've seen a shift to a buyer's market. While volume is still down as buyers methodically weigh their options, we can speak to more buyer activity since the start of the New Year, which should ultimately lead to an increase in sales volume.
Since June of 2017, we've been tracking and recording the bid-ask spread for Upper West Side townhouses. The bid-ask spread represents the percentage difference between the current average list price and average sales price. To collect the data, we calculated the average sales price of townhouses over the last 12 months on the Upper West Side, as well as the average ask price for townhouses currently on the market on the Upper West Side. The percentage difference between the two averages represents the spread.