With interest rates rising to historic highs, cash is king among Manhattan homebuyers. About 65% of homes bought between April and June this year were purchased without a mortgage – up from 57% in the first quarter and the most since tracking began in 2014, reports Bloomberg. Cash sales were up 22% compared to the previous quarter, while deals that required financing dropped 18%. The trend towards cash deals is seen as a signal of strength for Manhattan’s luxury market, while sellers are also keen to accept cash offers to close deals quickly in a slowing market.
- The median price for luxury deals that closed in the second quarter was $6.7 million.
- Meanwhile, across all prices ranges, properties traded at a median of $1.2 million.
By Jessy Bains, Editor at LinkedIn News
The second quarter of 2023 brought renewed balance to the Manhattan real estate market.
“As evidenced by the 48% quarter-over-quarter rebound in closings, Q2 2023 showed many positive signs of a market settling into normalcy. Barring a significant increase in new inventory, we may not see prices fall much further. Prospective buyers should seriously consider their available options, or risk missing out on a prime opportunity to buy in Manhattan.”
– Pamela Liebman, Corcoran President & CEO
Signs of the market normalizing emerged during the second quarter of 2023.
- Springtime’s typical boost in listing activity, the slowing pace of interest rate hikes, and some price relief have been encouraging signs for interested buyers to jump back into the market.
- Buyers during this quarter were rewarded with flexible sellers, and less competition. They also locked in prices that, without an influx of new inventory, may not fall much further.
- Even with the yearly decline, the market is finding its footing and settling into its long-term average pace of second-quarter sales.
- 2Q 2023 registered 3,516 closed sales, and while the overall number of contracts signed was significantly below last year (-20%), the Manhattan market gained momentum during the quarter. The YOY decline in contracts tightened from 20% below 2022 in April to 9% in June.
At 7,338 listings, inventory reached a two-year high in the second quarter of 2023, but there has been a noticeable decline in available listings in lower-cost price segments.
- The continuation of diverging supply trends became increasingly noticeable this quarter, as buyers on the hunt for homes under $2M saw their options fall 7% versus a year ago, while those looking for homes over $2M had about 6% more options from which to choose.
- This dynamic was mirrored in the resale co-op market, where inventory has tightened for eight consecutive quarters.
- Increased sales under $2M across the market led to an overall decline in price statistics, with new developments in the Financial District and Battery Park City an influential factor.
- Average price and average price per square foot fell for only the second time in two years. Average price was down following a lull in $20M + sales activity on Billionaire’s Row compared to last year. Average price per square foot’s 2% decline can be attributed to an uptick in sales in value-oriented neighborhoods.
- In the resale market, co-op prices held steady compared to a year ago, while condo prices declined annually with median prices reaching a two-year low.
- Average prices for the two product types also differed, with resale co-ops experiencing a 2% rise, and resale condos ticking down 3% because of the expanded market share of one-bedroom sales.
