“Though the start of 2024 showed mixed results, there are some signs that the market is improving. Sales were nearly flat at the beginning of 2024, with an uptick in contracts signed both in January and February. Currently, prices are trending downward, and buyers looking to maximize value for their dollar might just find what they are looking for.
Despite Manhattan’s ongoing challenges, including low supply and rising homeowner costs, the unwavering demand for properties continues to stand strong. This enduring resilience hints at the possibility of a springtime boost on our horizon.”
– Pamela Liebman, Corcoran President & CEO
While the Manhattan market faced some challenges in the First Quarter of 2024, there were glimmers of hope that the market is eager to recover.
- Economic factors like high mortgage rates, rising homeownership costs, and world events have impacted the real estate market.
- Nevertheless, some signs point to an earnest improvement: closed sales dipping only slightly, a measured increase in signed contracts, an uptick in inventory, and prices adjusting down.
Signed contracts fell 6% year-over-year, but activity and percentage changes varied by month, some of which suggest that pent-up demand is building in the marketplace.
- Signed contracts increased year-over-year (vs. 2023) in January and February, spurred by lower interest rates, rising consumer confidence, a strong stock market, and a rise in new listings.
- March signed contracts, however, saw a pullback. Interest rates began rising again in mid-February, causing buyers to put a pause on purchasing and holding back would-be sellers from listing.
Though inventory in 1Q 2024 had its first minor gain in three consecutive quarters, with approximately 6,300 units listed in Manhattan, it’s evident that buyers are still hesitant to part with their low mortgage rates.
- This rise in inventory is partly due to slower sales, as fresh listings remain in short supply.
- Annual changes in inventory varied by price point, with listings under $1M rising 10% YOY, while homes priced between $3M and $5M saw listings drop 9% YOY due to a drop in new development supply.
- Inventory on the East Side has exhibited more stability than other Manhattan submarkets. Active listings on the Upper East Side have been within 5% of 1,500 units for the two years.
Prices in the Manhattan market fell across the board due to buyer hesitancy, price sensitivity, and increasing mortgage rates and are now comparable to what we saw from 2014 to 2016.
- The high market share of resale co-ops, increase in closings under $2M, and a significant drop in new development sales combined to drive down sale price figures.
- As buyers continued seeking value, price per square foot figures declined, with average price per square foot down 14% annually.
- Average price per square foot for New Developments saw a 13% drop to $2,280, 10% below the five-year average.
- Average price for resale condos rose 3% YOY due to a 31% increase in sales over $5M, though median price followed the trend and dipped 3% annually.