The Manhattan real estate market experienced a significant slowdown in the first quarter of 2018 due to rising mortgage rates and the negative impact from the new federal tax bill. Closed sales transactions were the lowest in the pat 6 years and were down 25% y/y. New development closings (12% of all sales) were down 54% y/y while resale deals were down 18% y/y. Average price per square foot was down 19% y/y hurt by tough comps due to high prices in legacy contracts that closed last year and lower prices in the new development market. Medium sales prices were relatively stable and down 2% y/y. Given the weakness in the market, listing inventory increased 4.4% y/y and months of supply jumped 38% y/y to 8.4 months. The number of bidding wars was also dropped to 9.4% of the overall market, the lowest in the last 5 years. We expect 2018 to be a choppy year for the Manhattan real estate market given the headwinds we are facing. That said, with a stronger economy and job growth, the real estate market should should stabilize later this year with trends improving moderately from the 1Q18 levels.