January 2023 Market Overview

January 2023 Market Overview

  • Karp Dagan Team
  • 01/1/23

Happy New Year!


More Manhattan apartments traded in 2022 than in all but three years since 2012. This 10-year macro-level view illustrates that the market now more closely resembles pre-pandemic levels, dismissing any doomsday narratives and pointing to a continued market rebalancing after two frantic and unsustainable years of record activity. Overall, sales volume dipped 22.5% in Q4 year-over-year, and 17.8% quarter-over-quarter as high levels of uncertainty fueled by high inflation and a surge in mortgage rates persuaded some buyers and sellers to stay on the sidelines. Still, Manhattan, more than any place in the country, defies national trends and expectations. The average apartment in Manhattan sold for $2,000,542 in Q4– an 8.2% price increase compared to last year. Buyers–local, national, and international–continue to see the

value of owning property in the world’s capital and are willing to pay a premium even now. 


What is indisputable is that the streets of Manhattan are bustling. There is an energy in the city that is missing in other large cities. People want to live in New York City because there is no place like it.


Mortgage Rates Mortgage applications to buy a home dropped 13% in the last 2 weeks of 2022 as rates rose slightly again. The Mortgage Bankers Association forecasts average mortgage rates  for Freddie Mac's 30-Yr fixed of 5.2% in 2023 and 4.4% in 2024. 


Luxury Market 15 contracts at $4 million and above were signed last week in Manhattan, 2 more than the previous week. It was a lackluster total in a shortened post-New Year’s Day week, as condos outsold coops, 11-2, with 2 townhouses in the mix. 8 out of 13 apartment contracts were inked by developers including 3 units at Central Park Tower, 217 W 57th St, where the sponsor is offering aggressive incentives. 


Ultra Luxury Recap Apartments priced between $10 million and $20 million saw a 16.9% transaction volume surge year-over-year in Q4. This bright spot indicates that high-net-worth buyers will transact in today’s environment when quality turn-key quality homes are presented optimally and priced accurately. The benefits for buyers purchasing now are many, including less competition and greater odds of higher long-term appreciation than keeping money in the bank.


Renters Pay Up to Avoid Roommates - The number of inquiries each rental listing received on StreetEasy – a proxy for renter demand – showed that studio and one-bedroom listings are still highly sought after, while demand for rental listings with two or more bedrooms slowed rapidly after a strong surge this summer. This dip in demand for larger rentals is unexpected in a market where the citywide asking rent is up 18% from one year ago to $3,353, based on the StreetEasy Rent Index.


Looking Ahead Contract activity declined sharply year-over-year in Q4, signaling that the market will continue to recalibrate to start the new year. As buyers and sellers embrace the new market conditions more fully, the expectation is that deals will continue to happen sustainably. A changing market also provides an opportunity to revisit established norms. For instance, co-op buildings that revise their approval, refinancing, and renovation policies may fare better.


Work With Us

With our in-depth expertise and boundless knowledge, We are constantly being referred new business to help new clients navigate the complicated terrain of New York City real estate.

Follow Us on Instagram