Manhattan’s homebuying market weakened at the end of last year, but didn’t foreshadow a deep freeze heading into 2023.
Co-ops and condos traded for a median of $1.1 million in the fourth quarter, a 5.5% drop from the same period in 2021, according to appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. It was the first year-over-year decrease in prices since sales stalled at the beginning of the pandemic, in the second quarter of 2020.
The quarter, though, doesn’t appear to be the start of a steep tumble.
“You’re going to see a modest decline in pricing over the year, but not a correction,” said Jonathan Miller, president of Miller Samuel.
Tight inventory is “underpinning” property values and keeping them from falling more dramatically, according to Miller. As is the case across the US, Manhattan sellers are reluctant to settle for discounted prices or give up the low mortgage rates they secured before the Federal Reserve began raising interest rates in early 2022.
There were 6,523 homes on the market at the end of the fourth quarter. While that’s up 5.1% from a year earlier, it’s down 16% from the previous three months, and still a low level for Manhattan.
Even as short-term comparisons might suggest that Manhattan is struggling, the fourth-quarter data show a market that’s stronger than just before the pandemic. While prices have retreated from their highs, they’re still 10% above the $999,000 median at the end of 2019, and closings totaled nearly 6% than three years ago.
“The overall narrative is more negative than it actually is,” Miller said.