An indication promoting a house on the market is displayed outside of a Manhattan constructing in Latest York City on April 11, 2024.
Spencer Platt | Getty Images
Manhattan is becoming a buyer’s market as apartment prices fell and inventory rose within the second quarter of 2024, in response to recent reports.
The common real estate sales price in Manhattan fell 3% to simply greater than $2 million, in response to a report from Douglas Elliman and Miller Samuel. The median price fell 2% to $1.2 million, and costs for luxury apartments fell for the primary time in greater than a 12 months, in response to the report.
The value declines are a results of rising inventory of apartments on the market, that are also taking longer to sell. There are actually greater than 8,000 apartments on the market in Manhattan, which is higher than the 10-year average of about 7,000, in response to Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.
Manhattan now has a 9.8 month supply of apartments on the market, which suggests it will take 9.8 months to sell all the apartments available on the market with none recent listings, in response to Brown Harris Stevens. “Any number over 6 months tells us there is simply too much supply and we’re in a buyer’s market,” in response to the Brown Harris Stevens report.
The falling prices and rising variety of unsold apartments in Manhattan stand in contrast to the national real estate landscape, where continued tight supply continues to maintain prices high. Brokers and real estate analysts say the strong prices in Manhattan post-Covid became unsustainable, and each buyers and sellers are finally capitulating to the next rate of interest environment.
The sun sets on the skyline of midtown Manhattan and the Empire State Constructing in Latest York City, as seen from Jersey City, Latest Jersey, on April 23, 2023.
Gary Hershorn | Corbis News | Getty Images
“The buyers and sellers resolve is weakening,” Miller said. “At a certain point, they’ll only wait so long before they feel like they need to make a move.”
With the gap narrowing between buyer and seller expectations, more deals are closing. There have been 2,609 sales within the second quarter, up 12% from a 12 months ago, in response to the Douglas Elliman and Miller Samuel report. That marked the primary sales rebound in two years.
“Because the second quarter began, Latest York’s real estate market woke up from the doldrums during which it had languished for the primary quarter of 2024. Deals in all price categories began to emerge,” said Frederick Warburg Peters, President Emeritus of Coldwell Banker Warburg.
High rents in Manhattan are also continuing to assist sales. The common apartment rental price in May was still upward of $5,100 a month and rents are likely to rise within the late summer. Many potential buyers who were waiting out the sales market in rentals are finally deciding to purchase, hoping rates of interest will start to come back down at the tip of 2024 or early 2025.
“If people were sitting on the fence, the high rents possibly helped push them into the sales market,” Miller said.
Still, mortgage rates have a more muted effect on Manhattan real estate than the remainder of the country since most Manhattan sales are in money. Within the second quarter, 62% of deals were all money.
While prices fell for all segments of the Manhattan real estate market, the high end is among the many weakest, as the rich hold off on purchases until after the uncertainty of the elections. The median sale prices in the luxurious segment — or the highest 10% of the market — fell 11% within the second quarter, in response to Miller Samuel. Listing inventory of luxury apartments surged 22%.
“With the high end, this weakness could possibly be the start of a trend or simply a one-off,” Miller said. “We may have to see what happens within the second half.”
