Manhattan’s real estate scene has flipped to a buyer’s market as apartment prices dip and inventory climbs in Q2 2024, recent reports reveal.
The average sales price in Manhattan dropped 3% to just over $2 million, according to Douglas Elliman and Miller Samuel.
Median prices fell 2% to $1.2 million, and for the first time in over a year, luxury apartment prices also declined.
Rising inventory is a key factor here. Over 8,000 apartments are currently for sale, surpassing the 10-year average of about 7,000, notes Jonathan Miller, CEO of Miller Samuel.
Manhattan now has a 9.8-month supply of apartments, indicating a clear buyer’s market as anything over six months suggests excess supply.
This trend contrasts with the national market, where limited supply keeps prices high. Post-Covid Manhattan prices soared but are now correcting as both buyers and sellers adjust to higher interest rates.
“The buyers and sellers resolve is weakening,” Miller said. “At a certain point, they can only wait so long before they feel like they have to make a move.”
The narrowing gap between buyer and seller expectations is leading to more deals. Q2 saw 2,609 sales, a 12% increase from last year and the first rebound in two years.
“As the second quarter began, New York’s real estate market awakened from the doldrums in which it had languished for the first quarter of 2024. Deals in all price categories began to emerge,” remarks Frederick Warburg Peters, President Emeritus of Coldwell Banker Warburg.
High rents also fuel sales. May’s average rental price was over $5,100 per month, pushing more renters into buying.
Many hope for lower interest rates by late 2024 or early 2025. “If people were sitting on the fence, the high rents maybe helped push them into the sales market,” Miller said.
Despite this, Manhattan’s real estate remains somewhat insulated from mortgage rate impacts since 62% of Q2 deals were all-cash. Yet, luxury segments suffer more. Median prices in the top 10% fell 11%, with inventory up 22%.
“With the high end, this weakness could be the beginning of a trend or just a one-off,” Miller said. “We will have to see what happens in the second half.”
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