There Is A 38% Drop In Manhattan Real Estate Sales, But The Number Of Cash Deals Is At An All-Time High

A new report from the New York Times reveals that Manhattan real estate sales fell by 38% in the first quarter of 2014 due to a battle between buyers and sellers over prices and volatility in mortgage rates.

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A report by Douglas Elliman and Miller Samuel indicates that the total sales volume for the first quarter of 2022 dipped to $4.4 billion, with 2,242 apartments and townhouses sold, down from 2,546 in the first quarter of 2021. During the month of June, the average sales price of the property fell by 5% to $1.95 million while the median sales price fell by 10% to $1.075 million.

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There was a 29% decline in sales and prices in the fourth quarter of this year, suggesting that the nation's largest real estate market is beginning to correct after a post-pandemic boom in demand and prices. In Manhattan, where is the new “bottom” for brokers, buyers, and sellers is one of the biggest questions.

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Jonathan Miller, CEO of Miller Samuel, a firm that provides appraisal and research services, pointed out that we might see a slight increase in the spring market, but that it will differ depending on the Federal Reserve and how it holds rates.

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It is believed that one of the biggest challenges for a deal is that there is a wide gap between a buyer's and a seller's price expectations, while the amount of available inventory is relatively low, so buyers are not very well served when buying apartments in Manhattan. According to Miller Samuel, in the first quarter, there were 6,996 homes on the market, a slight decrease from the average of around 7,200 homes over the past five years.

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The buyers and sellers are still separated, according to Jason Haber at Compass. There is not a lot of panic selling, there is no feeling like they need to get out of there right now. There is no panic selling, or they feel that they have to get out of here now. The seller has confidence in their abilities. If you lose a buyer, you'll have another one down the road.

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In the first quarter of this year, Serhant found that sellers had trimmed their prices but not to the extent that they were able to satisfy today's bargain-hunting buyers. As a result of this, Serhant estimates that the average discount from initial list price to sale price was 7%, an increase from 5% in the fourth quarter. It was still possible for weary buyers to negotiate,” says Coury Napier, Serhant's director of research.

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Many brokers report that buyers have been calling for months with expectations of price cuts of 20% or more - only to be disappointed as price cuts of 20% or more have failed to materialize. Many brokers say buyers have been calling with expectations of price cuts of 20% or more - only to be disappointed as price cuts of 20% fail to materialize.

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It is my belief that large reductions will not be coming anytime soon," said Noble Black, with Douglas Elliman, who said, "Buyers have been waiting and waiting for huge reductions for the last three quarters, but they have not been coming."

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The big price declines seem to be behind us, and the cost of real estate is there to stay, according to Frederick Warburg Peters, president of Coldwell Banker Warburg in his first quarter report.

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A record high of 11% was experienced by luxury sales – or deals in the top 10% of the market by price – in the first quarter, where bids and interest remained particularly strong. As a result, Miller said, the share of luxury sales resulting in bidding wars in the quarter reached a record high. A wealthier buyer is usually a more cash-conscious buyer, so higher mortgage rates are usually less of a concern for wealthy buyers.

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Miller noted that gross sales for the quarter rose to a new record 57% when compared to the previous quarter, the highest on record. At the top end of the market, 3 out of 4 sales above $5 million were all cash deals, a record number.

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Considering the improvement in the high-end market that occurred over the course of the first quarter, brokers are beginning to feel as if the second quarter will be a stronger one. It has been reported that the Olshan Report indicates that there were 32 sales contracts per week on properties priced at $4 million or more in March compared to 16 contracts per week in January.

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Although the housing market in Manhattan is largely driven by the performance of the stock market in its first few months because Manhattan has so many buyers and sellers involved in finance, there are still many unknowns about how the housing market will perform in the coming months.

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Black described the spring housing market as a seller's market, but is in no way what you would describe as a buyer's market. It is a reasonable market with a lot of activity, but it has taken a long time for it to pick up.