The Fourth-Year Manhattan Apartment and Condo Market Suppressions During the Pandemic Era, according to Real Estate Agents
The median price of all apartments in Manhattan in the fourth quarter was $1,100,500, down 5.5% from the prior year, according to a report from brokerage firm Douglas Elliman and Miller Samuel Real Estate Appraisers and Consultants. The year-over-year price has dropped in the first time it has done so in the Pandemic era. Even so, the median cost of an apartment remains above pre-pandemic prices.
Sales slumped at the end of last year due to high housing prices and higher rates. Sales dropped 28.5% in the fourth quarter compared to the fourth quarter of 2021.
One-bedroom units with a median price of $1,140,000 were the biggest share of condos sold. The median price for a two-bedroom condo was $2,150,000. The co-ops median price was $710,000 for a one-bedroom and $1,325,000 for a two-bedroom.
Would-be home sellers across the country have become locked in to their current apartments because they purchased or refinanced into ultra-low mortgage rates during the past few years and are reluctant to buy at the current, much higher rate.
New York Properties are on the Rise: Rents, Sales and Inventory Rises in the Fourth Quarter, but Not as Fast as 2021 and Beyond
As a result, there were 6,523 listings in Manhattan at the end of the fourth quarter. The fourth quarter is 5% higher than the fourth quarter in 2021, but less than the third quarter of that year.
The market metrics of prices, sales and inventory are going up at a modest pace, with both prices and sales 10% and 6% higher over their pre-pandemic levels.
“This is an unusual situation where the low inventory is the by-product of mortgage rates being cut to the floor,” Miller said, eviscerating supply. “Normally, you’d expect inventory to expand with significant rate growth.”
“Sellers aren’t going to get the prices they got in 2021 and buyers aren’t going to get much improvement on affordability from 2022,” he said. The banks were disappointed because theirs is going dusty.
During the month of January in New York, it’s never been cheaper to rent an apartment than it was last month.
“Rents are within a whisker of the summer high, and it is only January, which is typically a weaker rental time,” said Jonathan Miller, president and CEO of Miller Samuel. “Almost every price indicator is at or near all-time records. It seems to confirm that rents aren’t going to go down.”
Miller said the opposite of rising rents was stabilizing rents. “And now rents are moving sideways, if not moving a little higher.”
Affordability continues to be a challenge across the housing market, with higher mortgage rates pushing homeownership out of reach for many people who are continuing to rent — and propelling strong demand for rentals.