Cycles & Q4 2023

Dear Friends and Family,

One of the core truths about the real estate market is that it has lows and highs—regular periods of renewal and cyclical change. In many ways 2023 was the opposite of 2022: with interest rates rising, then stabilizing, while the S&P 500 mounted a spectacular comeback to near-highs. In fact, 2023 finished off as the third best year of the past decade in terms of sales above $10 million, which seems surprising, but it's actually not! Over the past 40 years, I have seen this low-high, up-down cycle occur time and again - the market has stabilized, recovered, and then steadily gained ground over the coming bullish years.

Renewal

In 2024, we will again see the renewal of the real estate market as it shakes off the fear of rising rates. The Federal Reserve's dovish stance is seen positively across the economy. Successful transactions still require correct pricing and strategic timing. With a market in transition, I anticipate a strong rebound where we can take advantage of lower rates to move on or move up across all market segments.

Market Analysis (Recorded Sales)

Across Manhattan, recorded sale prices continued to increase YoY, with median prices increasing 7.3% and average prices increasing 5.3% from Q4 ‘22. For condos, the average price climbed 8.4%, to nearly $2.99M, the highest fourth quarter since 2018. Lower inventory led to a drop in the number of sales, but those that did transact did so for a premium, a good sign heading into the new year.

Market Analysis (Contracts Signed)

Condos also saw the largest increase in contracts signed, with 12.6% more contracts than this quarter last year. Contracts for properties in the luxury brackets (above $5M) experienced double-digit increases YoY and the number of contracts for ultra-luxury homes (above $20M) more than doubled from Q4 2022. This indicates a continued and strong demand for the luxury market going into 2024.

Cash Only

An interesting feature of 2023 was the ubiquity of the all-cash buyer. Representing 28% of buyers in 2023 (a nine-year high), they kept demand high and home prices buoyant. As sellers have been hesitant to offer discounts, all-cash offers prove to be sweeteners to some transactions, though they have not dented the stability of prices. Prices rose to the highest numbers seen since 2018 both for condos and co-ops across Manhattan.

Our Penthouse Report

Manhattan penthouses remained in demand throughout 2023, with an average PPSF of $2,809 and an average DOM of only 157, the highest and shortest on record, respectively. Seller hesitation led to an inventory dip, which contributed to lower sales volume, but ensured that the penthouses on the market sold for more money and in less time in 2023 than any time over the past six years.

This coming year promises to be one of renewal across New York City, as positive exuberance about the outlook continues to rise. If you or someone you know wants to catch the wave of renewal, let me know. The city remains an enduring symbol of progress and prosperity, with relentless innovation as a major economic and cultural center.

All the best,

Toni Haber

Licensed Associate Real Estate Broker
Founder, Toni Haber Team | Private Client Advisors
TONI@compass.com | 917.543.1999