Rising inventory and changing seller expectations are giving Manhattan homebuyers the upper hand, according to Douglas Elliman’s latest quarterly report.
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Rising inventory and slowing listings and sales schedules made Manhattan a homebuyer’s paradise in the second quarter, according to Douglas Elliman’s Q2 Elliman Report.
From April 1 to June 30, the median sales price in Manhattan decreased by 1.5% annually to $1.18 million, while the average sales price fell by 3.3% from the same period last year to $2 million. The decline in median and average sales prices stemmed from an increase in inventory, which increased for the first time in five quarters at an annual rate of 4.2% to 8,044 units.
The increase in inventory has brought Manhattan’s supply to 9.2 months at the current sales pace, giving homebuyers some breathing room. The market share of bidding wars dropped from 7.6% in the second quarter of 2023 to 7.2% in the second quarter of 2024, a decrease of 5.2%. This is a 68% decrease from the 8th quarter.
Miller Samuel CEO Jonathan Miller, who contributed to the second-quarter Elliman Report, said current market trends reflect homebuyers and buyers adjusting to a higher mortgage rate environment. Sellers have adjusted their pricing expectations, taking their listings off the market, and buyers are beginning to gravitate toward purchases as Manhattan’s median rent hit a high of $3,600 in June, he said.
“The resolve of buyers and sellers is waning,” Miller said. CNBC Wednesday. “At some point, they can only wait so long before they feel they have to take action. If people are on the fence, high rents may help them get into the sales market.
In the second quarter, homebuyers favored the co-op and condominium markets, with sales increasing 18.0% and 5.7% respectively compared with the same period last year. The median sales price for co-ops increased 1.8% to $800,000, while the median sales price for condos increased 3.4% to $1.7 million.
At the same time, the luxury market remained weak in the quarter despite a 22.4% increase in inventory and a 10.5% decline in the median selling price to $5.99 million. Miller said political turmoil and concerns about Wall Street heading toward a bear market have led to weakening sentiment among wealthy homebuyers.
“For the high end of the market, this weakness could be the start of a trend or it could just be a one-off,” Miller said. CNBC. “We’ll have to see what happens in the second half.”
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