Manhattan Apartment Prices Drop as Sales Crater 31% in Q4
Prices drop 4.7%, the first dip since 2020, with fewest signed contracts since 2008.
Manhattan apartment sales plunged by 31% in the fourth quarter and median prices declined by 4.7%—the first dip in prices since the beginning of the pandemic in early 2020.
The impact of rising interest rates also was reflected in a record number of all-cash deals in Manhattan, which accounted for 55% of all sales in the fourth quarter.
According to the Q4 sales report from Douglas Elliman and Miller Samuel, there were 2,546 sales in the fourth quarter, down from 3,692 in Q3 2022. The median Manhattan sales price of $1,100,500 in Q4 was down from $1,154,625. In a YOY comparison, prices dropped by 5.5%.
The overall price dip would have been more pronounced, but the high-end luxury segment—which is the top 10% of the market—resisted the economic headwinds with a 4% price increase in Q4. Since 2019, median prices for luxury apartments have increased by 21%, twice as much as the broader market.
“Lower affordability through higher rates and housing prices has cooled demand,” the Elliman report said. “However, earlier refinances and purchases made during the pandemic era have kept would-be sellers wedded to their much lower mortgage rates.”
In a leading indicator of the emerging slowdown, the fourth quarter of 2022 registered the poorest total of contracts signed since 2008. There were only 2,312 contracts signed in the fourth quarter, down 43% YOY, according to a new report from Corcoran.
Despite the drop in sales, the Elliman Report said a 15.7% quarterly drop in listing inventory in Q4 would limit decreases in the median price in Manhattan.
“Downward pressure on price direction in the coming quarters is anticipated to be modest, given the limited gains in listing inventory,” the report said.
The report suggested that the sales decline reflected a “return to normal” from the 2021 boom.
“The 2,546 sales total was 6.5% below the fourth quarter decade average, indicating the sharp sales decline was more about a return to more normalized conditions after the historic and unsustainable boom of 2021,” the Elliman Report said.
The report also noted that months of supply—the number of months to sell all listing inventory at the current sales rate—was 7.7 months in the fourth quarter, 48% slower than Q4 2021, but 7.2% faster than the same period in 2019.