A sign advertising a home for sale is seen outside a Manhattan building in New York on April 11, 2024.
Spencer Platt | Getty Images
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 median sale price of Manhattan properties fell 3 percent to just over $2 million, according to a report by 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, the report said.
The price drops are the result of an increase in the inventory of apartments for sale, which are also taking longer to sell. There are now more than 8,000 apartments for sale in Manhattan, which is higher than the 10-year average of 7,000, according to Jonathan Miller, CEO of Miller Samuel, an appraisal and research firm.
Manhattan now has a 9.8-month supply of apartments for sale, meaning it will take 9.8 months to sell all the apartments on the market without new listings, according to Brown Harris Stevens. “Any number over 6 months tells us there is too much supply and we are in a buyer’s market,” according to the Brown Harris Stevens report.
Falling prices and a growing number of unsold apartments in Manhattan contrast with the national real estate landscape, where continued tight supply continues to keep prices high. Real estate brokers and analysts say strong post-Covid Manhattan prices have become unsustainable and both buyers and sellers are finally capitulating to a higher interest rate environment.
The sun sets over the skyline of midtown Manhattan and the Empire State Building in New York, as seen from Jersey City, New Jersey, on April 23, 2023.
Gary Hershorn | Corbis News | Getty Images
“The resolve of buyers and sellers is weakening,” Miller said. “At a certain point, they can only wait so long before they feel like they have to make a move.”
With the gap narrowing between buyer and seller expectations, more deals are being closed. There were 2,609 sales in the second quarter, up 12% from a year ago, according to the Douglas Elliman and Miller Samuel report. This marked the first recovery in sales in two years.
“As the second quarter began, the New York real estate market woke up from the recession in which it had languished for the first quarter of 2024. Offers began to appear in all price categories,” said Frederick Warburg Peters, Chairman Emeritus of Coldwell Banker Warburg.
High rents in Manhattan also continue to help sales. The median apartment rental price in May was still over $5,100 a month, and rents tend to rise in late summer. Many prospective buyers who have been waiting to get out of the buy-to-let market are finally deciding to buy, hoping that interest rates will start to come down in late 2024 or early 2025.
“If people were sitting on the fence, high rents may have helped push them into the sales market,” Miller said.
However, mortgage rates have a more muted effect on Manhattan real estate than the rest of the country, since most sales in Manhattan are made in cash. In the second quarter, 62% of transactions were all cash.
While prices fell across 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 election. According to Miller Samuel, average sales prices in the luxury segment — or the top 10 percent of the market — fell 11 percent in the second quarter. Inventories of luxury apartments on the stock market increased by 22%.
“With the high end, this weakness could be the start of a trend or just a one-off,” Miller said. “We will have to see what happens in the second half.”
