Manhattan Real Estate Update: June 2023
Contract Activity and Inventory Dip While Luxury Market Flourishes
The Manhattan real estate market saw 984 contracts signed in June for condos and co-ops, marking a 16% annual reduction and an 18% decline from the previous month. This trend aligns with the typical seasonal variation. Although the June sales momentum fell slightly short of the usual average for the month, the buoyant market conditions of 2022 tend to amplify these year-on-year decreases. The contract activity for both condos and co-ops observed a similar decrease compared to the previous year.
Factors like heightened price sensitivity and increased borrowing costs continued to put a strain on the market segment valued below $3M, which saw a 20% dip in sales compared to June 2022. Conversely, the luxury market with properties over $3M witnessed a 9% year-on-year increase in sales. This boost was largely due to the top-tier market segment valued at over $5M, registering the best June performance since 2015.
While the 'Days on Market' figure is higher compared to the same period last year, it has been on a steady decline since the highest peak noted at the beginning of the year, primarily due to restrained inventory growth.
Supply Constraints put Upward Pressure on Pricing
June saw more than 7,300 property listings, a slight decrease compared to both the previous month and year. This is the second time in the past nine months that we have seen a year-on-year drop in inventory. This trend is mainly due to potential sellers enjoying favorable mortgage rates and choosing not to list their properties. Although there was an increase in co-op market supply compared to last year, it was counterbalanced by a decline in condo listings. The slight fall in listings compared to May represents a common seasonal trend.
The average price per square foot rose by 3% compared to the previous year. However, this figure was somewhat distorted by several high-end sales, such as Downtown penthouse transactions and properties with Central Park views. Excluding these sales, the price per square foot would have remained stable. On average, properties sold at a discount of 3.8% off the last asking price, which is 2% more significant than the previous year. Moreover, 67% of properties sold in June were priced lower than their last asking price.