MANHATTAN REAL ESTATE REPORT:
2nd Quarter 2023

Manhattan Real Estate Summary for Q2 2023

As the Manhattan market adjusted to the many challenges it faced at the start of 2023, signs of normalizing emerged during Second Quarter. Though many buyers put a pause on their search at the start of the year, springtime’s typical boost in listing activity, the slowing pace of interest rate hikes and a bit of price relief encouraged those waiting on the sidelines to jump back into the market. Those that took advantage of the cool-down were rewarded with less competition and flexible sellers, and were savvy enough to realize that without an increase in inventory, prices may not fall much further.

Market wide closings registered just over 3,500 sales, a convincing 48% rebound from last quarter, but a decline of 23% versus a record-high second quarter last year. Despite the exaggerated annual decline, the market found itself merely settling into its long term average pace of sales. While the overall number of contracts signed was also below last year, the decline in contracts tightened over the course of the quarter from 37% below 2022 in April to just a 9% decline in June, as sales began their retreat mid-way through Second Quarter 2022.

On a year-over-year basis, inventory decreased slightly. The approximately 7,340 listings was 8% below the post-Covid peak. Furthermore, diverging supply trends by price segment are notable in today’s price sensitive environment. Buyers searching with a budget under $2M found availabilities fall by 7% versus a year ago while those searching above $2M had 6% more inventory versus last year. This dynamic was mirrored in the resale co-op market, where inventory has tightened for eight consecutive quarters. As buyers maintain a close grip on their wallets, and sellers don’t want to give up their ultra-low mortgage rate, diminished inventory in lower-cost price segments could continue to be a challenge.

Overall price statistics reflected this gravitation towards lower-priced categories. With the share of sales under $2M continuing to expand, median price shifted down for the fourth consecutive quarter while average price and price per square foot also dipped slightly below last year. Despite the decline, the median price fi gure was still 12% higher than the trough seen late in 2020. Last quarter resale co-ops swelled to their highest market share in three years, while this quarter it was new development sales that grabbed a larger proportion of deals. Moreover, the new development market claimed more sales under $2M thanks to new developments selling in the Financial District and Battery Park City, further influencing the lower price statistics.

Manhattan Real Estate Sales Data for Q2 2023

• There were just over 3,500 closings in Second Quarter 2023, the lowest second quarter figure since 2018 excluding the 2020 market pause. Last year’s fourteen-year high exaggerated the year-over-year decline of 23%, though sales activity was just 5% below the historical average for second quarter.

• Sales rebounded versus a slow First Quarter 2023 by climbing 48%, a far greater rate than the 28% increase typically seen between first and second quarters.

• Sales volume was $7.3 billion, a decline of 24% year-over-year but double the volume from First Quarter 2023.

• Contract activity declined at a slightly lower annual pace than closings. The figure was down 20% year-over-year, the fifth consecutive quarter where contract activity declined annually.

• Days on market jumped 25% year-over-year to 131 days, about a month longer than last year. Both resale condo and co-op days on market increased by doubledigits annually due to lingering buyer hesitancy.

Manhattan Real Estate Inventory Data for Q2 2023

• Approximately 7,300 listings were on the market at the end of Second Quarter 2023, a slight decrease on a year-over-year basis but a 20% jump versus First Quarter 2023. This quarter had the second highest inventory figure of the past two years.

• The quarterly increase of 20% in inventory is typical of the active Spring selling season. A similar double-digit increase in listings between first and second quarters has occurred during seven of the past nine years.

• However, the changes in year-over-year inventory varied widely by price point. Demand at the low-end caused inventory under $2M to fall 7% yearover-year. All price ranges above $2M had more listings than last year, cumulatively by 6%. The most significant increase was seen in the $3M to $5M price range where listings increased 11% year-over-year.

• Active listings declined in Manhattan’s lower-cost submarkets, with the deepest declines seen in Upper Manhattan and Financial District/Battery Park City (down 16% and 13%, respectively). The West Side overall had a 10% annual gain in listings, the largest increase in Manhattan due to an accumulation of resale co-op inventory.

• As buyers gravitated towards value, the number of one-bedroom listings fell by 14% annually. Inversely, buyers in search of three bedrooms and larger had 8% more options than last year (about 170 more listings).

Manhattan Real Estate Pricing Data for 2nd Quarter 2023

• For the fourth consecutive quarter, market-wide median price fell on an annual basis. Median price fell 2% versus Second Quarter 2022 to $1.211M, though increased 10% versus last quarter’s two-year low.

• The decline was mainly due to an expanding share of sales under $2M.

• Average price fell for just the second time in two years as there was less activity over $20M along Billionaire’s Row compared to Second Quarter 2022.

• The average price per square foot figure of $1,816 was also lower than last year by 2%,. This was the first annual decline since Third Quarter 2021, due to a shift in sales activity towards value-oriented neighborhoods.

• Resale co-op prices mainly held steady compared to a year ago. The median price of $830,000 was unchanged versus last year and the distribution of sales by price range remained level. Average price grew just 2% annually; this was enough for the figure to reach a four-year high. Average price per square foot was skewed up 4% annually due to a $5,400 per square foot sale along Central Park South; if excluded the figure would have been flat year-over-year.

• Price statistics in the resale condo market declined annually across-the-board. Median price fell 7% annually to a two-year low as sales shifted towards lower priced categories. Average price per square foot also declined 7% while average price was 3% lower than last year on account of one-bedroom sales continuing to expand in market share.