A sign advertising a home for sale is seen outside a building in Manhattan, New York City, on April 11, 2024.
Spencer Platt | Getty Images
Manhattan is expected to become a buyer's market as apartment prices fall and inventory rises in the second quarter of 2024, according to new reports.
The median sales price of Manhattan homes fell 3 percent to just over $2 million, according to a report from Douglas Elliman and Miller Samuel. The median price fell 2 percent to $1.2 million, and luxury condo prices fell for the first time in more than a year, according to the report.
The price declines are due to a higher inventory of apartments for sale, which also takes longer to sell. There are now more than 8,000 apartments for sale in Manhattan, up from the 10-year average of about 7,000, according to Jonathan Miller, CEO of Miller Samuel, a real estate appraisal and research firm.
According to Brown Harris Stevens, Manhattan now has 9.8 months of supply of apartments for sale, meaning it would take 9.8 months to sell all the apartments on the market without any new listings. “Anything over 6 months tells us that there is a lot of supply and that we are in a buyer’s market,” Brown Harris Stevens said.
The falling prices and growing number of unsold apartments in Manhattan contrast with the national real estate landscape, where tight supply continues to keep prices high. Brokers and real estate analysts say that Manhattan’s strong post-Covid prices are no longer sustainable, and that both buyers and sellers are finally succumbing to the high-interest-rate environment.
The sun sets over the Midtown Manhattan skyline and the Empire State Building in New York City, as seen from Jersey City, New Jersey, on April 23, 2023.
Gary Hirschhorn | Corbis News | Getty Images
“The resolve of buyers and sellers is weakening,” Miller said. “At a certain point, they can't wait that long before they feel compelled to act.”
As the gap between buyers’ and sellers’ expectations narrows, more deals are being made. Sales totaled 2,609 in the second quarter, up 12% from a year ago, according to a Douglas Elliman and Miller Samuel report. It was the first sales rebound in two years.
“As the second quarter begins, the New York real estate market has awakened from the doldrums it was in during the first quarter of 2024,” said Frederic Warburg Peters, chairman emeritus of Coldwell Banker Warburg. “Deals are starting to appear in all price ranges.”
High rents in Manhattan also continue to help sales. The median apartment rent in May was still above $5,100 per month, and rents tend to rise in late summer. Many potential buyers who had been waiting for the rental sales market to cool down have finally decided to buy, hoping interest rates will start to decline in late 2024 or early 2025.
“If people were hesitant, higher rents may have helped push them into the sales market,” Miller said.
However, mortgage rates have had a more muted effect on Manhattan real estate than the rest of the country, where most Manhattan sales are all-cash. In the second quarter, 62% of transactions were all-cash.
While prices have fallen across all segments of Manhattan’s real estate market, the high end is the weakest, with the wealthy holding off on buying even after the election uncertainty. According to Miller Samuel, median sales prices in the luxury segment — or the top 10% of the market — fell 11% in the second quarter. Luxury condo listings rose 22%.
“As for the high, this weakness could be the start of a trend or just a one-off,” Miller said. “We'll have to see what happens in the second half.”
