The median price of a typical Manhattan apartment tumbled below $1 million for the first time in three years, according to a new housing survey, as the luxury real estate market continues to deteriorate. While this is good news for buyers, it is a frightening prospect for sellers as the condo market in the prime borough of New York City is rapidly cooling, and is likely to get much worse this year.

After declining for most of 2018, the median sales price for Manhattan apartments slipped again in the fourth quarter, with the median price moving below $1 million for the first time in three years, as brokers and sellers were forced to offer more significant discounts and perks amid a flood of inventory for sale, according to Bloomberg.

Condo and co-op prices declined to $999,000 in the three months through December, a drop of 5.8% from a year earlier, appraiser Miller Samuel and brokerage Douglas Elliman said in a report Thursday. Many apartments were sold for less than sellers originally sought, with an average discount of 6.2% from the last list price. That is up from price cuts of 5.4% a year earlier.

The price decline is due to a flood of inventory, increasing more than 17% over the previous year.

Prospective buyers are waiting on the sidelines as their options have dramatically increased over the last several quarters. That gives buyers greater negotiating power and has ended the era of a seller's market.

“We had a number of cases where a lot of people came back for second and third visits, and never made an offer, and it’s totally and completely tied to pricing,” Steven James, chief executive officer of Douglas Elliman’s New York City division, said in an interview. “Many sellers still have not gotten the message. I think many more sellers in 2018 got the message, and those who got the message sold.”

The report specified that studio and one-bedroom units continued to see the greatest inventory builds. For many sellers, it took 15% longer to sell their properties as demand waned in the fourth quarter.

Manhattan real-estate is unlikely to improve this year. The market has been damaged by a convergence of economic forces: An oversupply of newly built luxury apartments; demand from foreign buyers cooled; the new tax law, which limits the deductibility of state and local taxes; increasing taxes in New York; rising mortgage interest rates; financial market volatility; political uncertainty; and of course, a global economic slowdown.

“All that kind of created almost a perfect storm to drive down prices farther than people anticipated,” said Matthew Hughes, a broker with Brown Harris Stevens. “The market was very hot in 2015, 2016, and we needed a natural correction.”

As builders try to liquidate new apartments, some are offering to cover pay transfer or mansion taxes, attorneys’ fees, or provide buyers with perks, free butler or car service -- and even giveaways “that you’ve never even heard of just a couple years ago,” Hughes said. “I’ve seen it all.”

The contraction in prices and the dips in sales are a sobering reminder that the Manhattan real-estate market has entered a turning point, one where buyers have higher negotiating power, as sellers panic and drop their listing prices, a move that will send prices on a lower trajectory throughout the year.