Manhattan Real Estate Market Report: Q1 2023
SPiRALNY market reports offer accurate insight into sales closed transactions. SPiRALNY produces a quarterly, comprehensive analysis of the Manhattan Real Estate residential market.
Market-wide closings are down 38% YOY, returning to a pace seen during the first quarters of historically slower years from 2018 through 2020, but we saw a notable uptick in activity starting in mid-February.
- This time last year, sales reached a fourteen-year first-quarter record high, exaggerating the YOY decline we’re seeing.
- 1Q 2023 registered 2,500 sales and while the overall number of contracts signed was also significantly below last year (-34%), the Manhattan market gained some momentum during the quarter.
- The YOY decline in contracts tightened from 37% below 2022 in January to 20% in March, with a notable uptick in activity starting mid-February.
Unsurprisingly, slower sales and an uncertain market outlook caused inventory to increase 3% annually to 6,120 active listings.
- Notably, the YOY increase in inventory is in comparison to a five-year low and inventory is still 13% below the historical first quarter average.
- Furthermore, the annual increase in listings was attributed only to those priced over $1M, which grew 12%.
- Listings priced under $1M fell 13% annually. This inventory constraint in lower cost price segments is likely also a contributing factor causing fewer sales.
Average and median price declined for the second consecutive quarter with sales under $1M making up 50% of Manhattan closings, their highest market share in three years.
- The increased price sensitivity in the market expanded sales at the low-end, particularly resale co-ops, which declined at a slower rate than other types.
- Smaller, lower-priced residences had seen their demand erode in the post-pandemic recovery as buyers sought larger spaces and took advantage of low mortgage rates.
- This drove median price to its lowest point since the market pause and average price to a two-year low.
- Conversely, average price per square foot of $1,890 was supported by sales in super-prime locations, reaching its second-highest level in four years.
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