In the third quarter, the number of apartments sold in Manhattan dropped by 18%. Higher mortgage rates and a struggling stock market are hurting New York real estate.
The number of residential real estate transactions in Manhattan went down for the first time since 2020, according to the report from appraisal firm Miller Samuel and brokerage giant Douglas Elliman.
According to the report, the average price of a Manhattan apartment went up by 4% from last year to $1.96 million.
For a third quarter, the median sales price went up to the second highest on record. However, both sales and the average price per square foot went down. Still, the report says that they are the second highest for a third quarter in history.
The rate of price increases has slowed, and there are more items on the market, according to the report.
The report says that this doesn’t mean that the local real estate market is going back to the bad old days of the coronavirus lockdowns.
“While sales in Manhattan went down from 2021 to 2022, the number of sales was still much higher than before the pandemic,” the report says.
In total, there were 3,692 closings in the third quarter. This is 18.4% less than the same time last year, but it is still 44.4% higher than the number of closings in 2019 before the pandemic and 23.6% more than in Q3 of 2018.
The biggest drops are at the high end of the market
The last time apartment sales in Manhattan went down for a quarter was in the fourth quarter of 2020, when they fell by 21%.
Brokers say that the drop is just a sign that things are back to normal after sales in 2021 were pushed up artificially. They say that there are still buyers and sellers, and that sellers are lowering their asking prices because mortgage rates are going up. Miller Samuel says that the average discount, which is the difference between the sale price and the original list price, went up from 5.6% to 7% in the third quarter.
Miller Samuel and Douglas Elliman say that the number of signed sales contracts in September was 29% lower than the same month last year. Since signed contracts are a sign of what will happen in the next quarter, sales are likely to drop in the fourth quarter as well.
The biggest drops are at the high end of the market. In a report from Coldwell Banker Warburg, it was found that median discounts and median days on the market went up for apartments that cost more than $10 million. The report says that co-ops in “beautiful large pre-war apartments along Park and Fifth Avenues and Central Park West that have been dream homes for so many New Yorkers are now sitting empty for months or even years.”
Miller Samuel says that the number of signed contracts for apartments that cost $4 million or more fell by 50% in September.
