3Q 2022 ranks as the fourth-best quarter since 2008, proving that activity throughout the Manhattan market is still incredibly active despite rising mortgage rates and concerns about inflation.
“As we look at the data from the third quarter of 2022, it’s important to remember where the market was last year and the circumstances surrounding the unprecedented highs. While it seems like the numbers are giving us mixed messages, don’t be confused — the third quarter of 2022 was a historically strong quarter for the Manhattan market. 3Q 2022 was the fourth best quarter since 2008, based on the number of closed sales. Buyers are in different a position now than they were last year with concerns about inflation and rising mortgage prices. However, in Manhattan prices are stabilizing and we are already seeing an uptick in sales activity. As a result, we remain optimistic for the fourth quarter.”
– Ryan Schleis, Corcoran’s Senior Vice President of Research & Analytics
Even though we are seeing year-over-year declines in some areas, it only means that the Manhattan market is returning to pre-pandemic levels after a number of record-breaking quarters. People will always want to live in the city that never sleeps.
- With 4,485 closed sales, 3Q 2022 is the second strongest third quarter in sales since 2013, even with an annual 4% decline. For perspective, the number of sales in 2021 reached an eight-year record high.
- 3Q 2022 was also the sixth consecutive quarter that closings have exceeded 4,000 — the first time this has happened since 2008.
- As overall sales fell, so did sales volume — down 4% from last year to $8.85B.
- 3Q 2021 was only one of two quarters ever to report a sales volume over $9B, meaning that 3Q 2022’s figure is proof of ongoing strong activity throughout the Manhattan market.
In good news for buyers, pricing increases throughout Manhattan slowed in 3Q 2022 as they stabilize to pre-pandemic levels.
- Rising mortgage rates are affecting purchasing power, meaning buyers are now actively searching for lower priced homes. Thus, we are seeing a smaller drop in sales under $2M than we are seeing in homes priced over $2M.
- Buyers gravitating towards lower priced homes led to the 1% annual decline in median price in 3Q 2022, the first median price decline in Manhattan since 2Q 2020.
In 3Q 2022, 2,576 contracts were signed. While that is a significant drop of 29% from 3Q 2021’s near record high, it is still a very solid number and equivalent to the third quarters of 2016 and 2017. 3Q 2022 even surpasses contract activity from the third quarters of both 2018 and 2019.
- Contract activity in 3Q 2022 did hit a two-year low, but the decline is simply a signifier of a market normalizing after unprecedented year.
- Buyers are now reacting to national economic concerns and rising mortgage rates, and patience is key as everything takes time. For example, the strong performance in sales this quarter was largely due to contract activity from prior quarters. We will see the true performance of 3Q 2022 in the first of half of 4Q 2022.
Inventory reached its lowest level since 2017, with 6,681 listed units, but this is only a 2% decline from 2021. We’re seeing the pace of decline slow down, and an overall easing on inventory constraints.
- Active listings fell annually for a fifth consecutive quarter in 3Q 2022, however, the 2% year-over-year drop was the smallest annual percentage of decline seen over that time span.
- Listings fell by 10% annually under $1M, because of the increase in demand for homes at a lower price point. As a result available inventory priced over $3M rose 5% compared to 3Q 2021.
- The West Side gained 1,114 new listings — an annual jump of 5% and the largest throughout Manhattan.