Manhattan homes sales tumbled to a two-year low

The Manhattan housing market was as cold as the weather in New York City in the first three months of this year. High mortgage rates, the recent banking crisis, and overall economic uncertainty have interrupted the plans of many would-be buyers. These setbacks created a drop in real estate deals. In the first quarter of 2023, sales of Manhattan co-ops and condos fell to their lowest level in two years. 

There were 2,242 apartments sold in Manhattan at the beginning of 2023, down from 3,585 a year before, according to the latest Elliman Report. However, this drop in home sales did not lead to a significant increase in the listing inventory. The number of homes listed for sale in Manhattan in the first three months of 2023 reached 6,996, up 1.3 percent from a year ago but 2.4 percent below the five-year quarterly average of 7,165.

“The housing market continues to transition out of the pandemic-era housing boom a year ago as mortgage rates are more than double last year’s,” Jonathan Miller wrote. “The economic uncertainty has kept listing inventory low despite the annual decrease in sales as would-be sellers remain married to their record-low mortgage rates received during the pandemic era through refinances or purchases.”

Although NYC buyers have fewer options to choose from, home prices are now lower than they were in 2022. The median sales price fell 9.7 percent year-over-year to $1,075,000. In addition, homes listed for sale are spending more days on the market. In the first quarter of 2023, a listing went into contract after 75 days, up from 70 days in 2022. In addition, the average discount rose from 4.7 percent to 5.9 percent. 

The luxury market, which includes the top ten percent of all sales, saw strong competition among buyers. These buyers are less affected by rising interest rates, as many prefer to pay cash. At the beginning of 2023, cash buyers made up 56.8 percent of all home sales, setting a second consecutive record. The market share of bidding wars in the Manhattan luxury market climbed to an all-time high of 11.3 percent.

Resources:

“Elliman Report: Manhattan Sales 1Q 2023,” (Miller Samuel Inc., 2023)

“Sales of Manhattan apartments fall to the lowest level in two years,” by Emily Myers (Brick Underground, 2023)

“Manhattan real estate sales plunge 38%, but cash deals hit all-time record,” by Robert Frank (CNBC, 2023)

“Manhattan Home Sales Plummeted in First Quarter,” by Liz Lucking (Mansion Global, 2023)

“Manhattan home sales slow down coming out of pandemic boom,” by Eddie Small (Crain’s New York, 2023)