The Manhattan residential real estate market showed resilience in Q3 2024, with a slight 1.8% drop in closed sales compared to Q3 2023. The luxury market thrived, with contracts signed for $10-20 million properties up 15.4% and those over $20 million increasing by 16.7%. Condos gained popularity, with contracts up 25.1% year-over-year, reflecting a preference for modern amenities, while co-op transactions fell by 21.3%. Despite inventory constraints, which decreased by 0.3%, the median price rose by 13.6%, signaling continued strong demand in Manhattan

In the face of price sensitivity, uncertainty, and elevated rates, apartment sales rose by an impressive 45% compared to Q1 (2,596) showing continued resilience. More notable still, the luxury market saw a large rise in the number of signed contracts, with the $10-20 million price bracket seeing 32.4% gain year-over-year. Continuing its growth from last quarter, the Upper East Side saw an increase of 12.7% YoY in contracts signed. The upcoming election cycle usually sees lower-than-normal activity, so market conditions will adjust accordingly until the landscape becomes clearer.

Buyers have accepted elevated interest rates and show a willingness to return to the market after spending much of the last year on the sidelines. Ultra-luxury units priced above $20M continued their upward march, with a 140% surge in this category. While slow-to-close units led to a small decline of 5.2% year-over-year in recorded sales, this continued and sustained growth suggests that the market likely reached the bottom in Q4 2023.

An inventory shortage and higher-than-usual rates compared to the five-year average continued to drive trends in Manhattan's residential real estate market during the fourth quarter of 2023. While inventory was low, prices rose to the highest numbers seen since 2018 and an increase in contract activity this quarter highlights positive movement as we transition into 2024.

Maintaining its crowning status as a real estate capital, Manhattan remains a highly sought-after market. Despite experiencing the highest mortgage rates of the last two decades, this quarter saw significant activity, especially downtown and in the luxury sectors.

Despite continued financial headwinds, Manhattan remains a highly sought-after destination, prompting buyers and sellers to recalibrate their expectations in line with current market conditions.

All signs point to a spring awakening. After a frenzied 2021, and a cooler 2022, the market is returning to historical averages. This indicates that both buyers and sellers are accepting current conditions and moving forward with a transaction when it’s right for them. The hurdle issue continues to be inventory, so turnkey properties that are priced appropriately are trading.

Looking back at 2022, and more specifically at Q4, it is clear that the market is rebalancing. Despite doomsday narratives, 2022 was one of the strongest years in the last decade with more transactions than 7 of the past 10 years. While 2020 and 2021 were anomalous, last year saw steady growth compared to pre-pandemic levels.

We’re seeing a "return to normalcy" after an atypical 2020 and 2021. Overall sales and contracts signed were down 9.3% and 37.5% respectively compared to Q3 2021, returning to 2019 levels. While the $5-10M and $20M+ price brackets saw YOY growth in recorded sales, the $3-5M price bracket saw the largest decline in contract activity year over year, signaling that buyers are cautious, but moving quickly when the time is right.

As real estate often comes hand-in-hand with major life changes, there can be a lot of emotions involved in a transaction. But as the market fluctuates, it can be important to take a step back and look at the numbers and what they indicate.

2021 was an exceptionally strong year for New York real estate, and ended on an even stronger note. At nearly $7 billion, condo and co-op sales volume was the highest of any Q4 on record. Property in the city has traditionally been considered a sound investment, and the past few months of market correction from pandemic pricing prove that New York City is tough and will overcome most any hurdle.

Overall results exemplify strong consumer confidence and dismiss the false narrative that the City is dead. Sales surged to levels we haven't seen since 2013, and most importantly the median purchase price increased by 6%, signaling price recovery in the market. Buyers were inspired to act swiftly during the quarter due to tight inventory levels resulting from the record-breaking second quarter and the 30% decline in new listings year-over-year.

The real estate market continues to thrive and and we are now seeing a notable recovery in pricing, albeit prices are not breaking records yet. This upward trend in the market is the result of pent-up demand, reasonable pricing, low-interest rates, and an expanded pool of buyers. As we move into the second half of 2021, we'll be keeping a close eye on interest rates as well as the return of international buyers and tourists.

Ending the quarter, last week was the 9th consecutive week with more than 30 contracts signed over $4M—the longest streak in decades. Additionally, last week saw supply decline below 7,000 units for the first time since the pandemic began. If the current rate of absorption continues, the Manhattan market performance will continue to improve, especially at the high-end.

Manhattan residential real estate ended 2020 on a positive note. In the fourth quarter, contract activity rose 4% year-over-year, and listing inventory tightened. While 2020 was undoubtedly a year of reset, 2021 is expected to be a year of growth.