Manhattan Market at a Glance:
- 2,650 contracts signed
- 135 average days on market
- 6,120 homes in the inventory
- $1,890 Average price per square foot
The Randy Baruh team here with the Manhattan Q1 report!
The first quarter of 2023 highlighted the challenges faced by the Manhattan market. Economic factors such as interest rate hikes, stock market fluctuations, and recent bank collapses caused uncertainty among buyers. As a result, sellers lowered prices and increased negotiability to attract nervous buyers due to diminished demand and longer marketing times. Market-wide closings totaled 2,500 sales, returning to the pace seen in historically slower years from 2018 to 2020. This decline of 38% year-over-year was exaggerated by the record high sales in the first quarter of 2022, which set a fourteen-year record.
Although the overall number of contracts signed was significantly lower than last year, the Manhattan market showed some momentum during the quarter. The year-over-year decline in contracts narrowed from 37% below 2022 in January to 20% in March, with a notable increase in activity starting in mid-February. Slower sales and an uncertain market outlook led to an increase in inventory, which grew at a slower pace compared to any quarter last year, totaling 6,120 active listings, an annual increase of 3%. However, it's worth noting that inventory is still 13% below the historical first quarter average and the increase in listings was mainly attributed to properties priced over $1 million, which saw a growth of 12%. Listings priced under $1 million fell by 13% annually, contributing to the constraint of inventory in lower-priced segments and potentially affecting sales.
The average and median prices declined for the second consecutive quarter. The market saw increased price sensitivity, particularly in the low-end segment, such as resale co-ops, which declined at a slower rate compared to other types of properties. Smaller, lower-priced residences had experienced decreased demand in the post-pandemic recovery as buyers sought larger spaces and took advantage of low mortgage rates. However, in the first quarter of 2023, sales under $1 million accounted for 50% of Manhattan closings, marking their highest market share in three years. This drove the median price to its lowest point since the market pause, and the average price to a two-year low. On the other hand, the average price per square foot of $1,890 was supported by sales in super-prime locations, reaching its second-highest level in four years. So, there was a contrast between the low-end and high-end segments of the market in terms of performance during the first quarter of 2023.