Manhattan home prices were up throughout most of the pandemic, but we may be seeing the reversal of that trend.
In the fourth quarter of 2022, co-ops and condos traded for a median of $1.1 million, down 5.5 percent from the same time in 2021, according to data from the appraiser Miller Samuel and the brokerage Douglas Elliman cited in Bloomberg. That was the first year-over-year decrease since the second quarter of 2020.
The decline is due in part to low inventory and high mortgage rates. In the last quarter of 2022, Manhattan had 6,523 homes on the market, down 16 percent from the prior three months and a low level in general for the city. (Still, that was up 5.1 percent from the previous year.) And with mortgages skyrocketing, more than half of Manhattan buyers paid all cash for their properties, the highest share measured by Miller Samuel and Douglas Elliman since they started tracking in 2014.
Both of those factors contributed to an overall slowdown in deals, with just 2,546 closed in the fourth quarter. That’s a whopping 30 percent less than both the previous quarter and the year prior.
Despite these lower numbers, the Manhattan real-estate market is doing okay. “The overall narrative is more negative than it actually is,” Jonathan Miller, the president of Miller Samuel, told Bloomberg. Even though prices have dropped from their highest point, they’re still 10 percent above the median of $999,000 at the end of 2019. And closings are at almost 6 percent more than they were three years ago.
The luxury sector in particular has been propping up the market, working against many larger, downward trends. The top 10 percent of co-ops and condos bought in the fourth quarter had a median price of about $5.8 million, 4.2 percent more than last year. And when looking back at the last three months of 2019, that median price is almost 22 percent higher.
So while Manhattan experienced a dip that it hadn’t seen in a couple of years, it doesn’t mean that 2023 is all downhill from here. “You’re going to see a modest decline in pricing over the year, but not a correction,” Miller said.