A sign advertising homes for sale stands outside a building in Manhattan, New York City on April 11, 2024.
Spencer Pratt | Getty Images
Manhattan is becoming a buyer’s market as apartment prices fall and inventory increases in the second quarter of 2024, according to a new report.
The average Manhattan property sales price fell 3% to just over $2 million, while the median price fell 2% to $1.2 million and luxury apartment prices fell for the first time in more than a year, according to a report from Douglas Elliman and Miller Samuel.
The price declines are being driven by a growing inventory of apartments for sale that are taking longer to sell: There are more than 8,000 apartments for sale in Manhattan right now, up from an average of about 7,000 over the past decade, according to Jonathan Miller, CEO of appraisal and research firm Miller Samuel.
According to Brown Harris Stevens, Manhattan currently has a 9.8 month supply of apartments on the market, meaning that without new listings, it would take 9.8 months to sell all of the apartments on the market. “Any figure above six months indicates an excess of supply, meaning it’s a buyer’s market,” the Brown Harris Stevens report said.
Manhattan’s falling prices and growing number of unsold apartments stand in contrast to the real estate landscape across the nation, where a continued lack of supply has kept prices high. Brokers and real estate analysts say Manhattan’s high post-pandemic prices are no longer sustainable, and buyers and sellers are finally succumbing to the rising interest rate environment.
The sun sets over the skyline of Midtown Manhattan and the Empire State Building in New York City, as seen from Jersey City, New Jersey on April 23, 2023.
Gary Hirschhorn | Corbis News | Getty Images
“Buyers and sellers are becoming less determined,” Miller said. “At some point, they can only wait so long before they feel they have to act.”
As the gap between buyer and seller expectations narrows, more deals are closing: 2,609 sales in the second quarter were up 12% from the same period last year, according to a report from Douglas Elliman and Miller Samuel, marking the first recovery in sales in two years.
“The New York real estate market woke up from its slump as the second quarter began. “While the first quarter of 2024 was slow, we saw activity opening up across all price ranges,” said Frederick Warburg Peters, president emeritus at Coldwell Banker Warburg.
High rents in Manhattan also continue to drive sales. The average rental price for an apartment in May was still over $5,100 per month, and rents tend to rise as summer comes to an end. Many potential buyers who have been waiting for the rental sales market to end are finally deciding to buy, hoping that interest rates will start to fall in late 2024 or early 2025.
“If people hadn’t made the decision, rising rents may have contributed to pushing them into the sales market,” Miller said.
Still, because most Manhattan real estate transactions are cash transactions, the impact of mortgage rates has been more muted than in other parts of the country: 62% of transactions in the second quarter were all-cash.
All segments of the Manhattan real estate market saw prices fall, but the luxury segment saw the biggest declines as wealthy buyers held off on purchasing until the election uncertainty was over. According to Miller Samuel, the average sales price in the luxury segment (the top 10% of the market) fell 11% in the second quarter. Luxury apartment listings for sale jumped 22%.
“At the higher end, this weakness could be the start of a trend or it could be temporary,” Miller said. “We’ll have to wait and see what happens in the second half of the year.”
