Manhattan is becoming a buyer’s market as condo prices fall and inventory rises in the second quarter of 2024, according to a new report.
According to a report by Douglas Elliman and Miller Samuel, the average real estate sales price in Manhattan fell 3% to just over $2 million. The median price fell 2% to $1.2 million, with luxury apartment prices falling for the first time in more than a year, the report said.
The price decline is due to an increase in the inventory of condos for sale, which are also taking longer to sell. There are currently more than 8,000 apartments for sale in Manhattan, up from the 10-year average of about 7,000, said Jonathan Miller, chief executive of appraisal and research firm Miller Samuel.
Brown Harris Stevens said Manhattan currently has a 9.8-month supply of apartments for sale, meaning it would take 9.8 months to sell out of the market without any new listings All apartments on. “Any data longer than six months tells us there is too much supply and we are in a buyer’s market,” Brown Harris Stevens reported.
The decline in Manhattan prices and the increase in the number of unsold apartments stands in stark contrast to the national real estate landscape, which remains tense and keeps prices high. Brokers and real estate analysts say strong post-COVID-19 home prices in Manhattan have become unsustainable, with buyers and sellers ultimately giving in to a higher interest rate environment.
The sun sets over the skyline of Midtown Manhattan and the Empire State Building in New York City as seen from Jersey City, New Jersey on April 23, 2023.
Gary Hershorn | Corbes News | Getty Images
“The resolve of buyers and sellers is waning,” Miller said. “At some point, they can only wait so long before they feel they have to take action.”
As the gap between buyer and seller expectations narrows, more deals are closing. According to a report by Douglas Elliman and Miller Samuel, sales in the second quarter were 2,609 units, an increase of 12% year-on-year. This marks the first sales rebound in two years.
“The second quarter begins as the New York real estate market recovers from the downturn. “The first quarter of 2024 was not a good one. Deals are starting to appear in all price categories,” said Frederick Warburg Peters, president emeritus of Coldwell Banker Warburg.
High rents in Manhattan also continue to boost sales. The average apartment rent in May was still above $5,100 per month, and rents tend to rise in late summer. Many would-be buyers who were waiting for the rental sales market to end have finally decided to buy, hoping that interest rates will start to fall in late 2024 or early 2025.
“If people are on the fence, higher rents may help them get into the sales market,” Miller said.
Still, mortgage rates have less of an impact on Manhattan real estate than in other areas of the country because most sales in Manhattan are cash. In the second quarter, 62% of transactions were cash.
While prices fell in all parts of the Manhattan real estate market, prices were weakest at the high end of the market as wealthy people delayed purchases until after election uncertainty. Miller Samuel said the median sales price in the luxury market (that is, the top 10% of the market) fell 11% in the second quarter. Luxury apartment listings surged 22%.
“For the high end of the market, this weakness could be the start of a trend or it could just be a one-off,” Miller said. “We’ll have to see what happens in the second half.”
