The second quarter of 2023 brought renewed balance to the Manhattan real estate market.
“As evidenced by the 48% quarter-over-quarter rebound in closings, Q2 2023 showed many positive signs of a market settling into normalcy. Barring a significant increase in new inventory, we may not see prices fall much further. Prospective buyers should seriously consider their available options, or risk missing out on a prime opportunity to buy in Manhattan.”
– Pamela Liebman, Corcoran President & CEO
Signs of the market normalizing emerged during the second quarter of 2023.
- Springtime’s typical boost in listing activity, the slowing pace of interest rate hikes, and some price relief have been encouraging signs for interested buyers to jump back into the market.
- Buyers during this quarter were rewarded with flexible sellers, and less competition. They also locked in prices that, without an influx of new inventory, may not fall much further.
Market wide closings rebounded 48% quarter-over-quarter, yet declined 23% from a record second quarter in 2022.
- Even with the yearly decline, the market is finding its footing and settling into its long-term average pace of second-quarter sales.
- 2Q 2023 registered 3,516 closed sales, and while the overall number of contracts signed was significantly below last year (-20%), the Manhattan market gained momentum during the quarter. The YOY decline in contracts tightened from 20% below 2022 in April to 9% in June.
At 7,338 listings, inventory reached a two-year high in the second quarter of 2023, but there has been a noticeable decline in available listings in lower-cost price segments.
- The continuation of diverging supply trends became increasingly noticeable this quarter, as buyers on the hunt for homes under $2M saw their options fall 7% versus a year ago, while those looking for homes over $2M had about 6% more options from which to choose.
- This dynamic was mirrored in the resale co-op market, where inventory has tightened for eight consecutive quarters.
Median price declined for the fourth consecutive quarter due to an expanding share of sales of homes priced under $2M.
- Increased sales under $2M across the market led to an overall decline in price statistics, with new developments in the Financial District and Battery Park City an influential factor.
- Average price and average price per square foot fell for only the second time in two years. Average price was down following a lull in $20M + sales activity on Billionaire’s Row compared to last year. Average price per square foot’s 2% decline can be attributed to an uptick in sales in value-oriented neighborhoods.
- In the resale market, co-op prices held steady compared to a year ago, while condo prices declined annually with median prices reaching a two-year low.
- Average prices for the two product types also differed, with resale co-ops experiencing a 2% rise, and resale condos ticking down 3% because of the expanded market share of one-bedroom sales.