New York’s residential real estate markets faced challenging times in 2023, including during the 4th quarter. Purchasers experienced diminished buying power due to inflation, recession fears and increasing interest rates. The result was a price adjustment in Manhattan — with prices approaching levels not seen since 2015-16. Sales fell annually for the fifth straight quarter in a row.
Market-wide, closings fell by 3% to 2,787 sales valued at $5.5 billion in volume (240 of those sales in our trophy market over $10 million) and the median price per square foot fell year-over-year for the second consecutive quarter down to $1,342.
New listings hit a four-year low as many homeowners financed or refinanced at low mortgage rates and are now hesitant to list. Inventory also fell year over year for the sixth time during the last two years. New development registered their lowest inventory launch in 15 years. But buyer urgency is still hampered by market concerns and median days on market increased in most categories to 84.
Thankfully, as 2023 came to a close, we saw some reassuring signs of a stabilizing market, with inflation cooling and mortgage rates beginning to subside from their peak in August. For the first time since mid-2022, cooperatives, New York City’s largest inventory-type, saw an increase with the majority uptick in the $1 million to $2 million range.
The rental market saw its first decline in the median rental price across the larger unit categories with more units staying on the market longer after peaking in July/August.
During this first month of 2024, there has been an uptick in customer calls for showings. With the Fed and media hyping the lowering of interest rates during the upcoming year, buyers have a window of opportunity to come into the market with less competition.
The first three months of the year are typically good months for new listings as the market picks up steam after the holiday hangover. But all eyes are now squarely on Wall Street and the Fed to see if they can pull off a soft landing for the economy while the waters are still turbulent in corporate America. Couple this with an election year which no one can predict and 2024 looks like it’s going to be another challenging year!