Median sales price for Manhattan apartments slipped for the first time since the pandemic began
- Condo median sales price dropped 5.9 percent to $1,647,500, co-ops were down 1.9 percent
- The number of sales in the fourth quarter fell 28.5 percent compared to the previous year
Many co-op and condo sellers failed to get the deal they wanted in the fourth quarter of 2022 as the median sales price for Manhattan apartments slipped year over year for the first time since the pandemic began.
The combined median sales price for Manhattan condos and co-ops was $1,100,500, down 5.5 percent compared to the previous year, according to fourth quarter Manhattan sales data in the latest edition of the Elliman Report.
Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report, says the findings are further proof that the Manhattan real estate market is reverting to a more normal pattern after a sales frenzy during the pandemic.
It's important to remember that the sales market in 2021 was supercharged, and that distorts year over year comparisons. Although the median sales price for co-ops and condos was down in the fourth quarter compared to the fourth quarter of 2021, it’s actually up 10.2 percent compared to the pre-pandemic fourth quarter of 2019. Similarly, the number of apartment sales in the fourth quarter of 2022 fell 28.5 percent year over year, but was 5.9 percent higher than the last quarter before the pandemic.
Likewise, listing inventory in the fourth quarter was up 5.1 percent year over year but up just 1.8 percent compared to 2019 levels.
Buyers and sellers both have to compromise
Hesitation by sellers in the fourth quarter of 2022 was matched by uncertainty from buyers. The fourth quarter market report from Corcoran notes how, in the face of higher mortgage rates, inflation, and economic uncertainty, buyers adjusted their budgets downwards and sellers had to become more negotiable. “As the market transitions, sales continue to be influenced by buyers playing wait and see, leading to slower movement in supply and pricing,” says Ryan Schleis, Corcoran’s senior vice president of research and analytics.
Miller says one of the reasons the median sales price dropped is because the average size of new development units fell sharply—with buyers of brand new apartments opting for smaller units.
According to the fourth quarter data, the average square footage of apartments sold in new development was 1,320 square feet, which is 9.4 percent smaller than last year. This resulted in average price per square foot going up by 2.9 percent year over year to $2,415 but average and median sales price going down.
The median sales price for new development in the fourth quarter was $1,981,794, down 10.9 percent compared to the same period last year. Serhant’s Manhattan new development market report for the fourth quarter identifies how contract prices for condos with two or more bedrooms all decreased, while smaller studio and one bedroom apartments saw prices increase.
The fourth quarter Manhattan sales report from Coldwell Banker Warburg notes how smaller properties sold much faster than larger, more expensive ones.
The market slowdown might indicate buyers have some leverage. Miller’s advice is a bit more circumspect: Get ready for disappointment in 2023, he says. “Sellers are going to be disappointed that they are not going to achieve the pricing they might have a year ago and buyers are going to be disappointed that prices aren’t going to correct in a significant way because inventory is still low.”
The analysis of the fourth quarter data in the market report from Bond New York notes that while 2022 finished with considerably less pending sales than it did at the start, “the reality was this kind of activity was never sustainable.”
Buyers get a bit more time to shop around
The months of supply—the number of months it would take to sell all available inventory—was 7.7 months in the fourth quarter of 2022. The 20-year average for Manhattan is 8.5 months so the market is still moving faster than long term norms but is clearly slower than it was a year ago. During the supercharged pandemic sales market, the months of supply fell close to 5 months.
“The market pace is slowing down so what you have is a modest growth in inventory and a sharp drop in sales,” Miller says.
The median price for Manhattan condos in the fourth quarter was $1,647,500, down 5.9 percent compared to the same period in 2021. Although condo sales fell sharply year over year, they still remained above pre-pandemic levels. For co-ops, the median sale price in the fourth quarter was $784,547, a 1.9 percent decline year over year.
The fourth quarter Manhattan sales report from Brown Harris Stevens identifies the Upper East Side as having the largest share of co-op and condo resales, with 23.8 percent. The second largest percentage share of resales in Manhattan took place south of 14th Street with 20.3 percent of deals. The fourth quarter Manhattan sales report from Serhant notes more buyers returned to Midtown neighborhoods, which were some of the areas most hammered during the pandemic shutdown.
According to the fourth quarter Manhattan sales report from Compass, the Upper East Side saw an 8.2 percent increase in contracts compared to the previous quarter. The report also notes that condos fared the worst in the fourth quarter, with signed contracts sinking 53.5 percent year over year and 20.9 percent compared to the third quarter of 2022, while co-ops fell 37.0 percent and just 0.7 percent, respectively.
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