Prices of these luxury homes, which constitute the top 20% of the market, fell to their lowest levels since 2013, according to a new report via StreetEasy. 

Luxury homes, priced at or above $3,816,835, dropped 6.1% in the fourth quarter over the previous year. Sellers are beginning to accept a declining market that has shifted to buyers -- where prices are being negotiated to the low end – in return, this has created downward momentum in prices. 

StreetEasy said inventory soared last quarter by 12.2% over the previous year, with at least 4,354 luxury homes sitting on the market.

"With so much new construction saturating the Manhattan real estate market, we were bound to see prices start to sink at record paces," said StreetEasy Economist Nancy Wu.