A sign advertising a home for sale is displayed outside a building in Manhattan in New York City on April 11, 2024.
Spencer Platt | Getty Images
Manhattan is emerging as a buyer’s market as home prices fell and inventory rose in the second quarter of 2024, according to new reports.
According to a report by Douglas Elliman and Miller Samuel, the average home sales price in Manhattan fell 3% to just over $2 million. The average price fell 2% to $1.2 million, and luxury apartment prices fell for the first time in more than a year, according to the report.
The price declines are due to the increasing inventory of apartments for sale, which are also taking longer to sell. There are now more than 8,000 apartments for sale in Manhattan, higher than the 10-year average of about 7,000, according to Jonathan Miller, CEO of Miller Samuel, the appraisal and research firm.
According to Brown Harris Stevens, Manhattan now has a 9.8-month supply of apartments for sale, meaning that without new listings, it would take 9.8 months to sell all of the apartments on the market. “Any number over 6 months tells us there is too much supply and we are in a buyer’s market,” the Brown Harris Stevens report said.
Falling prices and the rising number of unsold homes in Manhattan contrast with the national real estate landscape, where persistently tight supply continues to keep prices high. Agents and real estate analysts say Manhattan’s high prices are no longer sustainable after the coronavirus crisis and both buyers and sellers are finally capitulating to a higher 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 Hershorn | Corbis news | Getty Images
“The resolve of buyers and sellers is waning,” Miller said. “At a certain point, they can only wait so long before they feel like they need to do something.”
As the gap between buyer and seller expectations narrows, more deals are closing. According to the report from Douglas Elliman and Miller Samuel, there were 2,609 sales in the second quarter, up 12% year over year. This was the first increase in sales in two years.
“At the beginning of the second quarter, the New York real estate market emerged from the doldrums “In which it stagnated in the first quarter of 2024. Deals began to emerge at all price points,” said Frederick Warburg Peters, president emeritus of Coldwell Banker Warburg.
The high rents in Manhattan also continue to encourage sales. The average apartment rental price was still over $5,100 per month in May, and rents tend to rise in late summer. Many potential buyers who have been waiting to sell rental properties are finally deciding to buy, hoping that interest rates will fall in late 2024 or early 2025.
“If people remained undecided, the high rents might have helped push them into the market,” Miller said.
Still, mortgage rates affect Manhattan real estate less than the rest of the country because most sales in Manhattan are in cash. In the second quarter, 62% of transactions were cash-only.
While prices fell for all segments of the Manhattan real estate market, the high end is among the weakest as the wealthy hold off on purchases until after election uncertainty. According to Miller Samuel, average sales prices in the luxury segment — or the top 10% of the market — fell 11% in the second quarter. The supply of luxury apartments increased by 22%.
“At the high end, this weakness could be the start of a trend or just a one-time event,” Miller said. “We have to wait and see what happens in the second half.”
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2024-07-02 04:00:55
www.cnbc.com
