2Q Manhattan Report Overview

Manhattan's real estate market remained challenging in the second quarter of 2024, but it ended on a more stable note. Both supply and demand saw slight increases compared to 2023, as lower prices enticed buyers back into the market. While it’s still too early to declare a full recovery, the quarter's results suggest that Manhattan's market may have turned a corner.

For the first time since rising mortgage rates disrupted the market in mid-2022, Manhattan experienced improvements in both closings and contracts on a quarterly and annual basis. Sales increased by about 1% year-over-year and 34% quarter-over-quarter, reaching approximately 3,150 closings. Signed contracts, totaling around 3,200, expanded by 3% from last year and 13% compared to the previous quarter. While the annual gains in the second quarter of 2024 weren’t dramatic, the quarterly increases were stronger than typically seen in a second quarter, hinting that demand in the Manhattan market may have reached an inflection point.

After nearly two years of declining inventory, Manhattan's listed inventory appears to be gradually climbing. In the second quarter of 2024, active listings rose for the second consecutive quarter, up 3% year-over-year to 7,539 units, slightly above the ten-year average. Unlike the previous quarter, where inventory grew due to fewer sales, this quarter's shift was driven by an increase in new listings entering the market. Although many potential sellers remain hesitant, moderating mortgage rates helped push new listings up 12% annually in the second quarter of 2024, marking the first significant replenishment of new listings since early 2022.

Manhattan prices declined across the board for the second consecutive quarter, a trend not seen in seven years. Despite steady deal activity and tight supply in key areas, elevated mortgage rates, lingering inventory, and buyers' sensitivity to value continue to characterize a buyers' market. As a result, the median price fell 2% year-over-year to $1.181 million, its lowest second-quarter level since 2018, excluding the 2020 market pause. More significantly, the average price per square foot dropped by double digits for the second consecutive quarter, down 11% to $1,671—a level last consistently seen in 2015.

While the second quarter of 2024 didn’t produce monumental results, it did signal improvements on both the supply and demand sides of the Manhattan market. Many sellers have adjusted their expectations, bringing more value to the marketplace than in recent years. Buyers, particularly those with adjusted budgets or paying in cash, are responding, leading to signs of a cautious but growing recovery.

Key Takeaways from the Quarterly Report:

• For the first time since rising mortgage rates upended the market in mid-2022, Manhattan closings and contracts improved on a quarterly and annual basis. The number of sales rose about 1% annually and 34% quarterly to about 3,150 closings.

• After nearly two years of falling inventory, listed inventory in Manhattan is slowly climbing too. Active listings rose for the second consecutive quarter, up 3% annually to 7,539 units, just above the ten-year average.

• Manhattan prices fell across-the-board for a second consecutive quarter, which hasn’t happened in seven years. More significantly, average price per square foot fell annually by double-digits for a second straight quarter, down 10% to $1,671, similar to figures last consistently seen in 2015.