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Manhattan's real estate market has shifted in favor of buyers, with declining property prices and increasing inventory levels. This change provides prospective buyers with more options and negotiating power. The trend is a result of various economic factors influencing the market dynamics, making it an opportune time for individuals looking to invest in Manhattan real estate. Buyers can now take advantage of the lower prices and greater selection of properties available.
KEY POINTS
Boston Brand Media brings you the latest news - Manhattan is becoming a buyer’s market as apartment prices fell and inventory rose in the second quarter of 2024, according to new reports.
The average real estate sales price in Manhattan fell by 3% to just over $2 million, based on a report from Douglas Elliman and Miller Samuel. The median price decreased by 2% to $1.2 million, and for the first time in more than a year, prices for luxury apartments also dropped.
These price declines are due to the rising number of apartments available for sale, which are taking longer to sell. Currently, there are over 8,000 apartments for sale in Manhattan, exceeding the 10-year average of about 7,000, as noted by Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.
Manhattan now has a 9.8-month supply of apartments for sale, meaning it would take 9.8 months to sell all the apartments on the market without any new listings, according to Brown Harris Stevens. “Any number over 6 months indicates an oversupply, marking a buyer’s market,” the Brown Harris Stevens report states.
The falling prices and increasing number of unsold apartments in Manhattan contrast with the national real estate market, where tight supply continues to keep prices high. Brokers and real estate analysts suggest that the strong post-Covid prices in Manhattan became unsustainable, and both buyers and sellers are now adjusting to the higher interest rate environment.
"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.”
Boston Brand Media also found that with the gap narrowing between buyer and seller expectations, more deals are closing. There were 2,609 sales in the second quarter, up 12% from a year ago, according to the Douglas Elliman and Miller Samuel report. That marked the first sales 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,” said Frederick Warburg Peters, President Emeritus of Coldwell Banker Warburg.
High rents in Manhattan are also continuing to help sales. The average apartment rental price in May was still upward of $5,100 a month and rents tend to rise in the late summer. Many potential buyers who were waiting out the sales market in rentals are finally deciding to buy, hoping interest rates will start to come down at the end of 2024 or early 2025.
“If people were sitting on the fence, the high rents maybe helped push them into the sales market,” Miller said.
Still, mortgage rates have a more muted effect on Manhattan real estate than the rest of the country since most Manhattan sales are in cash. In the second quarter, 62% of deals were all cash.
While prices fell for all segments of the Manhattan real estate market, the high end is among the weakest, as the wealthy hold off on purchases until after the uncertainty of the elections. The median sale prices in the luxury segment — or the top 10% of the market — fell 11% in the second quarter, according to Miller Samuel. Listing inventory of luxury apartments surged 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.”
For questions or comments write to writers@bostonbrandmedia.com
Source: CNBC
