Manhattan sales REPORT:
4th QUARTER 2023

Manhattan Real Estate Summary for Q4 2023

2023 proved challenging for the Manhattan real estate market, with high mortgage rates, recession fears, financial market unrest, and global events weakening market confidence. This led to declines in sales, inventory, and prices. However, the year concluded with signs of market stabilization. The fourth quarter of 2023 saw minimal changes in sales and inventory compared to the previous year, with some market segments showing improvement; inflation began to ease without triggering a significant downturn; and mortgage rates started to decrease. As we enter 2024, while some challenges from 2023 linger, there's hope that this quarter's stability will set a positive tone for improvement in 2024.

In the fourth quarter of 2023, sales declined for the fifth consecutive quarter, albeit at a slower pace than earlier in the year. Market-wide, closings dropped by 3% annually to approximately 2,800 sales, totaling $5.47 billion in volume. Notably, resale co-ops — Manhattan's largest product type — experienced a 2% year-over-year increase in sales, marking the first annual gain since mid-2022. Signed contracts decreased by 3% annually to about 2,300 deals, yet several weeks in the fourth quarter of 2023 outperformed the same period in 2022.

Listed inventory decreased for the sixth time in two years this quarter. By mid-December, Manhattan had 6,385 active listings, a 2% annual reduction. This decline was attributed to fewer new listings and a scarcity of new development launches throughout the year. New listings reached a four-year low this fall, as sellers, many benefiting from low mortgage rates, showed reluctance to list. Concurrently, new developments launched only about 100 units for sale, marking the slowest fall in launches in 15 years. Nonetheless, certain demand spikes, such as increased co-op sales and a slight rise in closings between $1M and $2M, helped deplete supply.

Despite the reduced supply, ongoing market concerns continued to affect buyer urgency, with the average days on market increasing by 6% annually. However, properties priced correctly still sold rapidly, with one in three contracts signed this quarter doing so within 60 days or less, an improvement from one in five last year.

In the fourth quarter of 2023, prices adjusted to the weaker demand and buyers' reduced purchasing power. Both average and median price per square foot declined for the second consecutive quarter, down 5% and 9% to $1,785 and $1,305, respectively, bringing Manhattan prices back to levels last seen in 2015 and 2016. Despite this, the absolute median and average sale prices slightly increased compared to the previous year, a shift driven by closings in larger units, where all-cash payments are more common.

Looking ahead to 2024, the market may face continuing challenges from the previous year, along with new ones, such as the US presidential election. However, if mortgage rates decline further and rents remain at record highs, a combination of lower prices may unlock pent-up demand. Regardless of what 2024 holds, there is still confidence in the long-term appeal and resilience of the Manhattan real estate market.

Manhattan Real Estate Sales Data for Q4 2023

• With just under 2,800 sales, Manhattan closings in Fourth Quarter 2023 fell 3% annually and were 10% below the 10-year average. This was the second-slowest fourth quarter for Manhattan sales since 2011 (after Fourth Quarter 2020).

• Sales volume at $5.467 billion was also down 3% year-over-year and 9% below the 10-year average. As with the number of closings, this was Manhattan’s lowest fourth quarter for total dollars spent since 2011.

• 2023 saw about 11,500 sales, down 27% annually and the second lowest total since 2009 (after 2020).

• Contracts signed fell 3% year-over-year to roughly 2,300 deals, the seventh consecutive annual decline. World events, mortgage rates, and limited new inventory continued to impact contract activity.

• There were about 10,700 contracts signed in 2023, down 18% annually and the second-slowest year since 2011.

• The factors affecting demand have weighed on marketing timeframes. For the fourth consecutive quarter, average days on market rose year-over-year, up 5%— about a week—to 117 days.

Manhattan Real Estate Inventory Data for Q4 2023

• Listed inventory fell year-over-year for the third consecutive quarter, down 2% year-over-year to nearly 6,400 active listings.

• This was the second lowest fourth quarter for listed inventory since 2017.

• Listed inventory fell by single-digit annual percentages for most price ranges. Small upticks were seen from $500K to $1M and $2M to $3M, the segments where demand receded most over the last year.

• Active listings fell on the East Side, Downtown and Uptown. On the other hand, listed inventory rose 12% in Midtown due to a build-up of listings under $1M while West Side inventory saw a handful of additional resale co-op listings compared to last year, pushing inventory there up 2% annually.

• Smaller apartments saw greater year-over-year drops in listed inventory than larger units. Fourth Quarter 2023 had the fewest new studio and one bedroom listings in eight years. Two and three+ bedrooms had negligible yearly percentage changes in active listings.

Manhattan Real Estate Pricing Data for 4th Quarter 2023

• Versus last year, sale price figures rose slightly while price per square foot figures declined.

• Median price rose 2% year-over-year to $1.125M. Average price rose just 1% year-over-year to $1.970M. Price increases were driven by an increased market share of two and three+ bedroom closings but the year-over-year percentage increases were muted by a simultaneous shift in the market share of closings towards co-ops and away from condos.

• Price per square foot figures declined as buyers sought value. In Fourth Quarter 2023, the share of sales under $1,500 per square foot jumped 8% annually to 63%, the highest in over two years. In response, median and average price per square foot fell 9% and 5% to two-and-a-half-year lows of $1,305 and $1,785, respectively. Price per square foot figures were similar to their late-2015 levels.

• Resale co-op average and median price rose 7% and 8%, respectively, to $835K and $1.356M, driven by a 49% spike in closings over $5M. Price per square foot figures fell, however activity shifted to buildings offering value, bringing the share of closings under $1,200 per square foot to a five-year high.

• Resale condo average price figures spiked over 10% year-over-year due to several $65M+ sales at 220 Central Park South and 432 Park. Price per square foot statistics were largely stable versus a year ago, as there were no significant shifts in the number or share of sales by price, size or location.

• In contrast to resale condos, new development average price figures declined versus a year ago, with average price per square foot falling 10% to $2,340. The number and market share of $5M+ sponsor sales fell significantly, driving the averages down. Median price figures were level with a year ago as the drop in high-end sales was offset by a market share shift from one to two bedroom sales.