Manhattan home prices fell in the end of 2022, marking the first decline since 2020

Manhattan's housing market has changed quite a bit in the past year. After a record-breaking start, the housing market slowed down in the second half of last year due to interest rate hikes, low inventory, and recession fears. 

In the fourth quarter of 2022, the combined median sale price for Manhattan condos and co-ops was $1,100,500, down 5.5 percent from 2021, according to Miller Samuel Inc. Manhattan home prices dropped for the first time since the start of the pandemic. The modest decrease in the asking prices is likely tied to the overall decline in home purchasing activity. 

The average rate for a 30-year home loan surpassed the 7 percent mark at the end of October, sidelining some would-be buyers. There were 2,546 homes sold in Manhattan in the last four months of 2022, down from 3,692 in the third quarter. In addition, a rising number of homebuyers paid all cash for their properties. The market share of cash buyers reached 55.2 percent, the highest on record. 

Unfortunately, the slowdown in home-buying activity had little to no impact on the listing inventory. In the 4Q of 2022, Manhattan had 6,523 active listings, 16 percent below the previous quarter. According to the report, the sharp decline in home sales and low inventory indicate that after a record-breaking 2021, Manhattan's housing market is returning to pre-pandemic levels.

“The market metric to focus on in 2022 was the surprising restraint of new supply coming into the market,” Jonathan Miller, CEO of Miller Samuel, wrote in the report. “Listing inventory fell sharply from the prior quarter to reach pre-pandemic levels, despite sales and prices remaining higher than in the same period in 2019.”

The fourth quarter data might suggest that Manhattan’s housing market is duller than ever, but Jonathan Miller says that is not the case. While home prices went down year-over-year, they remain 10 percent above the 2019 median of $999,000. The fourth quarter of 2022 also saw 6 percent more sales than the last quarter of 2019.

Resources:

“Elliman Report: Manhattan Sales 4Q 2022,” ((Miller Samuel Inc., 2023)

“Manhattan apartment sales plunge in fourth quarter as brokers fear a frozen market,” by Robert Frank (CNBC, 2023)

“Manhattan Home Prices Fell for the First Time Since Mid-2020,” by Tori Latham (Robb Report, 2023)

“Manhattan’s Residential Sales Market Finally Feels Shaky Economy’s Effects,” by Celia Young (Commercial Observer, 2023)

“Median sales price for Manhattan apartments slipped for the first time since the pandemic began,” by Emily Myers (Brick Underground, 2023)

“Manhattan Home Prices Slip 5.5% in First Decline Since Mid-2020,” by Jennifer Epstein (Bloomberg, 2023)