The Manhattan apartment market navigated a complex environment in the second quarter. While buyer and seller behavior adjusted to limited inventory, rising interest rates, and a focus on price, the market showed surprising strength.
Sales Rise Despite Headwinds
The second quarter saw 2,596 apartment sales, holding steady compared to last year. This is particularly impressive considering a significant jump (45%) from the previous quarter. This seasonal increase indicates that buyers remain motivated, and sellers are adapting their strategies to the current market.
Areas perceived as offering more value, like Midtown East (including Murray Hill and Kips Bay), thrived. Sales in this submarket climbed 15.2% year-over-year. This area boasts lower median sales prices and price per square foot compared to Manhattan as a whole. Additionally, recent waterfront improvements on the East River make it attractive to first-time buyers, budget-conscious consumers, and pied-à-terre seekers. The Upper East Side also displayed growth, with a 12.7% increase in signed contracts and steady price gains.
Overall, Manhattan's real estate market demonstrates continued resilience in the face of uncertainty. Sellers are becoming more flexible on pricing, but deep discounts are uncommon. The upcoming election might cause some to delay purchases until the political climate stabilizes. However, New York's allure remains strong, attracting consistent interest and solidifying its position as a premier location.
Have We Shifted To A Buyer’s Market?: The average sales price for real estate in Manhattan has dropped by 3%, now standing just above $2 million, based on a report from Miller Samuel. The median price decreased by 2% to $1.2 million. This decline in prices is attributed to the growing inventory of apartments for sale, which are taking longer to sell. Currently, there are over 8,000 apartments on the market in Manhattan, exceeding the 10-year average of approximately 7,000, as noted by Miller Samuel.
Manhattan now has a 9.8-month supply of apartments for sale, meaning it would take nearly 10 months to sell all available units without new listings. The market is currently oversupplied. For those looking to buy, now might be the perfect time to explore potential opportunities.
Some key takeaways:
- Manhattan home price declines are a result of rising inventory of apartments for sale, which are also taking longer to sell.
- The gap between buyer and seller expectations is narrowing, and more deals are closing.
- High rents in Manhattan are also helping sales as many potential buyers who were waiting out the sales market in rentals are finally deciding to buy.
Rental Market Year over year the average listing price for Manhattan rental apartments is up 3%. Two Bedrooms saw the greatest increase, at 10%, while three bedrooms performed the worst at -1% growth. June saw a 24% increase in inventory compared to a year ago. Brooklyn rents remained flat with the only growth seen in the studio market, at 9%. All other size apartments saw declines.
Cash Still King In April, with rates still high, buyers paid entirely in cash for 64% of the homes sold in Manhattan.
Luxury Market: The luxury market continued to defy expectations, with the $10-$20 million and $20 million+ price brackets showing significant increases in signed contracts, climbing by 32.4% and 8.3% year-over-year, as high-net-worth buyers showed a willingness to transact for trophy properties. Notably, there were 10.3% fewer ultra-luxury properties listed at $20 million and above compared to the same period last year. The overall market inventory increased minimally year-over-year, with a 7.6% sequential uptick.
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