The third quarter is in the books and there is a lot to report about Manhattan’s real estate market. These past few years have been very interesting, from the struggles the cities faced during the height of the pandemic in 2020 to an incredible recovery period in 2021 that spilled into early 2022.
It should come as no surprise that the market started to cool down by Q3. The frenzy of activity happening last year was exciting, but it was not a sustainable pace. Those who wanted to move back to the city are now back and we are starting to see a return to normalcy when it comes to Manhattan real estate sales.
Overall, Manhattan apartment sales were down by 18% in Q3 2022 compared to Q3 2021. Much of this can be attributed to high inflation and mortgage rates, which have slowed real estate markets almost everywhere in the country. Our luxury home market tends to be a little less affected by mortgage rates as there are many cash buyers and alternative financing solutions being utilized. However, dips in the stock market and inflation, in general, have had their effect on market activity.
The good news is home prices remain high along with employment and income levels during this inflation period. This quarter represents the first decline in New York real estate sales since 2020 and we’ve experienced near-record transaction activity between then and now. Low housing inventory continues to drive sales and luxury buyer demand will always remain strong in Manhattan. Today, we are seeing a more normal pace of sales activity that is sustainable after the major drops in 2019 and 2020 followed by the dramatic upswing in 2021. The roller coaster is simply leveling out and we expect things to stay steady for the foreseeable future.
Elliman Report: Q3 2022
As always, we like to review The Elliman Report. Here are some of the key findings from the Q3 2022 Manhattan Sales Report:
Manhattan Co-ops and Condos:
- Average Sales Price: $1,955,042 (down 9.3% from Q2 2022, up 4.3% from Q3 2021)
- Days on Market: 70 (down 18.6% from Q2 2022, down 53.9% from Q3 2021)
- Listing Inventory: 7,741 (down 2.8% from Q2 2022, up 0.6% from Q3 2021)
Manhattan Luxury Homes:
- Average Sales Price: $8,026,848 (down 9.6% from Q2 2022, up 7.7% from Q3 2021)
- Days on Market: 91 (down 24.8% from Q2 2022, down 65.1% from Q3 2021)
- Listing Inventory: 1,638 (up 15.4% from Q2 2022, up 5.1% from Q3 2021)
Manhattan New Development:
- Average Sales Price: $3,972,749 (up 0.8% from Q2 2022, up 18.8% from Q3 2021)
- Days on Market: 83 (down 27.2% from Q2 2022, down 68.3% from Q3 2021)
- Listing Inventory: 1,145 (down 9.3% from Q2 2022, up 10.1% from Q3 2021)
As you can see, prices are still up compared to last year and homes are taking a little longer to sell. However, listing inventory is up compared to Q3 2021, which helps explain how the market has leveled out in terms of sales numbers. We see this as a natural market correction heading into Q4, which will probably continue with similar trends as it’s almost always the slowest quarter of each year.
It is still a great time to buy and sell real estate in Manhattan. Buyers and sellers just have to be better prepared with the right expectations and planning. For help with your next home purchase or sale in Manhattan, contact Tom & Mickey today.