With high mortgage rates, still high sales prices, and low inventory, it's no surprise that the number of Manhattan homes sold in 2022 tanked, especially compared to 2021. After several tumultuous years in New York City real estate, 2023 looks to be somewhat…dull.
Sales and Inventory Dropping
Gone are the days of one-day listings selling over the asking price with multiple offers. Instead, the median price is dropping, and the market, across the board, is slowing down. At the end of the fourth quarter of 2022, there were 6,523 listings in Manhattan. While that's 5% higher than the number of listings in the fourth quarter of 2021, it's 15.7% lower than the number of listings in the third quarter of 2022.
The median price of all apartments in Manhattan in the fourth quarter of 2022 was $1,100,500, 5.5% lower than the median price in 2021. Predictably, the median price dropped throughout 2022 as mortgage rates rose. Sales, in turn, dropped 28.5% in the fourth quarter of 2022 compared to the same quarter in 2021.
Rising Interest Rates
Much of the explanation for the slowing sales rests with mortgage rates, though not solely because of rising interest rates. The dual-pronged problem is also due to the historically low interest rates buyers enjoyed before the pandemic. Buyers who bought when interest rates were 3% or lower are loathe to sell now, knowing that they won't be able to get that rate again, and anything they buy will likely come with twice as much—or more— interest. As a result, those buyers are watching and waiting and not selling, causing the lack of inventory fueling the slowdown. Across New York City, inventory is down 2%.
So what does all this mean for buyers and sellers? It depends. Sellers can't realistically expect to get sky-high prices and a line out the door as they could in 2021. And buyers, even if they find a great home at a great price, should go in knowing that their mortgage will still cost them quite a bit more than in previous years.
Contact an Experienced NYC Real Estate Attorney
But that doesn't mean it's a bad time to buy. 2023 could be an excellent year for cash buyers to enter the market. Still others, because of their situations, may find themselves needing to buy or sell this year, irrespective of market trends. Whatever your situation, the expert real estate law team at The Law Office of Melvin Monachan can help you weigh your options and determine the best approach for your situation. Contact us online or by phone at (347) 389-1682 today.