Brown Harris Stevens has just issued its Fourth Quarter Manhattan Residential Market Report for 2022, offering an in-depth look at residential sales trends in Manhattan for the last quarter of 2022. As inflation and mortgage rates peaked and the stock market weakened, it was no surprise that the residential sales market continued to cool as we wrapped up a downward trending 2022 after a red-hot first quarter of the year. As you review the data and my analyses below, it is important to do so retaining the context that we often forget that Q4 2022 saw a very similar number of closings to Q4 2018 and 2019, a reminder that while activity now isn’t where it was in 2021 or Q1 of 2022, this is certainly not the slowest market we’ve seen. There is in fact great opportunity for those who approach today’s market with savvy and conviction.

 

Our market is ever changing and so I’ve again contextualized and supplemented my analysis below by drawing from Brown Harris Stevens’ Contract Signed and January Inventory Reports as well as data on signed contracts for the Upper Luxury segment of the market ($4M+) which I closely monitor. It is my hope that you will find this assembly of data points and ensuing analyses useful as you weigh your needs, be they immediate or just for information.

 

In your review of the below, should you wish to receive any of the reports here referenced in their entirety, would like any further detail on the information here enclosed or have any needs or questions for which I can be of service, please don’t hesitate to call.

With all my best wishes,

The Overall Market

The average Manhattan apartment sales price was $1,978,787 in Q4 2022 which is virtually unchanged from the prior quarter when it was $1,987,736.  The average apartment sales price declined approximately 3% from the same time last year when it was $2,049,014.

Here it’s important to note that the average sales prices for Manhattan were in great part supported by strong New Development sales which on average saw an 11% rise from $3,257,477 in Q4 2021 to $3,626,070 in Q4 2022. This uptick in high-end New Development closings helped balance the softening in resale figures which averaged $1,561,815 in Q4 2022 compared to $1,822,343 for the same period a year ago, a 14% drop illustrating the impact that economic conditions and interest rates have had on property values. Resale co-ops only dropped 5% from last year whereas resale condos fell about 19% overall as fewer high-ticket resale 3+ bedroom condo averages dropped to $4,772,983 in Q4 2022 from $6,808,444 in Q4 2021.

As for activity, there were 35% fewer closings in Q4 2022 at 2,738 compared to 4,242 in Q4 2021 which as mentioned represents the surge in activity that characterized the end of 2021 and start of 2022. While 2023 has started off well with a 13% rise in contract activity between the last week of 2022 and first week of 2023, the same period one year ago was about 40% stronger.

Upper Luxury: $4M+

Mirroring what we saw throughout the market, the second half of 2022 saw 507 contracts signed which accounted for only approximately 38% of the total deals in 2022 during which there were 1,343 contracts signed on apartments $4M and up according to year-end data from the Olshan Report which covers activity in this price range. Here too the data must be viewed in context with historic market performance as 2020 saw very little activity due to the pandemic with only 645 contracts and 2021 brought unprecedented highs with 1,919 contracts signed resulting from pent-up buyer demand, a strong stock market and very attractive financing options. Zooming out and looking at the past decade, we find that 2022 saw more deal activity in this segment of the market than 2016 – 2019 during which time there was an average of 1,079 contracts signed per year. Instead activity in 2022 resembled that of 2013 – 2015 when contract signings ranged tightly between 1,340 – 1,372.

Inventory

Inventory contracted as we transitioned into the new year as it often does – January saw a 9% decrease in the supply rate which came in at 5.1 months which though higher than the same time last year when inventory was very lean at 3.9 months remains below what is generally considered a balanced market with a supply rate of between 6 – 7 months.