The Pulse - Manhattan Luxury Market 11/12/24
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Manhattan Luxury Contracts Surge 50%; Co-ops Make a Remarkable Comeback
Welcome to this week's edition of The Pulse, that turns data into insights for smart real estate decisions. This week, we delve into the surge in luxury contracts, the unexpected strength of co-ops, and what this could mean for your real estate strategy. Here’s what you need to know.
Last week, luxury contracts surged by 50%, marking an impressive 86% increase compared to the same period last year. New listings rose by 55% from the previous week; however, overall inventory remains 46% lower than this time last November. This underscores a strong luxury segment heading into the close of the year.
Co-ops' Resurgence: Co-ops captured 44% of the market share, nearly matching condos at 49%. This is a noteworthy shift, given that co-ops typically hold a much smaller share, sometimes even trailing behind townhouses.
Neighborhood Dominance: Downtown continues to lead with a 44% market share, followed by the Upper West Side at 23%, suggesting sustained demand in core luxury neighborhoods.
Discounts: Seventeen properties (44% of contracts) saw price reductions, with a median discount of 8%.
Dollar Sales Volume: Total sales volume increased by 32% last week, totaling $257.16M, a strong signal of buyer engagement.
$10M and Over Market: Contracts for properties priced at $10M and above constituted 8% of the market, indicating continued interest in ultra-luxury assets. However, this segment shows signs of a potential slowdown, as activity remains limited compared to other price points, with buyers perhaps more cautious in the current economic climate.
New Development: New d evelopment contracts accounted for 18% of the market share, reflecting a steady demand for modern luxury residences and amenities.
The Market Pulse is 1.7 pts and has fallen -0.1 pts from the past month and has risen 3.5 pts from this time last year. The market remains in neutral territory neither favoring sellers or buyers.
#1- 247 W 12PHB (West Village): A co-op listed at $15.995M, featuring 4 bedrooms and 3.5 baths across 4,163 sq. ft. ($3,842 psf). The property was on the market for 133 days and saw a price reduction of $1.995M.
#2- 11 Bank Street (Townhouse): Listed at $15M, this townhouse offers 7 bedrooms and 5 baths over 5,855 sq. ft. ($2,561 psf). It was on the market for 303 days.
The Federal Reserve's recent 25-basis-point rate cut, anticipated by markets, left mortgage rates unchanged. However, with the 10-year Treasury yield on the rise, mortgage rates remain under upward pressure, with the average 30-year fixed rate at 6.79%. Analysts worry that rising inflation could pause rate cuts, keeping mortgage rates elevated for the foreseeable future.
With only a few weeks until the slower holiday season, this period offers a valuable window to position properties. If a contract isn’t secured by Thanksgiving, it may be wise to consider temporarily removing your listing from the market until early next year. Accumulating days on the market in a slower season can send negative signals to buyers and impact positioning.
This season brings negotiation potential, with 44% of listings closing at a median discount of 8%. For properties that have lingered on the market for over 100 days, sellers may be more flexible as they look to finalize deals before year-end.
The median price of last week's contracts was $6M, placing activity in the bread and butter segment of the luxury market. Co-ops are providing notable value, with a 20% to 30% price advantage over condos, which appeals to buyers open to considering renovations. Proximity to sought-after locations near private schools also enhances the appeal of co-ops.
In 2022, renovated properties commanded a 25% to 30% premium. Recent data suggests this premium has narrowed to about 18%, indicating that more buyers are open to undertaking renovations themselves to realize added value.
The Manhattan luxury market is showing resilience and growth, with co-ops unexpectedly leading the charge and year-end discounts creating unique opportunities. As the year closes, staying informed on these trends can help you make timely and strategic real estate decisions.
Interested in learning more? Contact me for the three charts every buyer should know before making a decision. For sellers, if your listing has expired and you’re considering re-listing in the new year, feel free to reach out for advice. Some of my clients of expired listings refer to me as the “real estate doctor” for helping them secure the results they want. Just recently, I guided a client to an all-cash contract near asking price after listings with two prior brokers. Feel free to reach out to me for custom deep data and expert advice.
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May your real estate dreams and goals become a reality.
Carol Staab has an innovative luxury real estate practice that provides an elite level of concierge service through unparalleled world-class marketing and a hands-on business approach. Her mission is to give her clients an exceptional experience while helping them achieve the best results possible.
