The Pulse - Manhattan Luxury Market 12/23/24

Welcome to The Pulse, where I turn Manhattan’s real estate data into clear, actionable insights to help you make smart decisions. Whether you’re buying, selling, or keeping tabs on the market, I’ve got you covered. Let’s break it all down.

Market Highlights

• Contracts dropped 6% from prior week & up 72% from this time last year
• Inventory Declines, but Sellers See Opportunity -Total listings dropped 57% week-over-week, following seasonal norms as the fall market winds down. But here’s the twist—new listings are up 35% compared to last December, signaling that sellers are stepping into the market to seize opportunities amid strong buyer activity.
• Condos Lead the Way - Condos continued to dominate with 21 contracts signed, grabbing 62% of the market share.
• Co-ops Surge - Driven by Upper East Side Activity-Co-ops had a strong showing, with 11 contracts signed (32% market share), thanks to significant activity on the Upper East Side.
• Upper East Side Boom - The Upper East Side captured 44% of the market last week, with 15 signed contracts—an impressive performance in a typically quieter month.
• Ultra-Luxury Strength ($10M+) - Seven contracts were signed in the $10M+ market, making up 21% of all deals—a higher-than-average showing, reflecting continued confidence in the ultra-luxury segment.
• New Development Dominance - New development properties captured 38% of the market share, with 13 contracts signed.
• Dollar Volume Surges - Contracts totaled $354,055,000, up 31% week-over-week, driven by higher-priced deals and increased activity.
• Discounts Close Deals - 41% of contracts included discounts, with a median price reduction of 8%. Sellers willing to adapt are securing deals in this competitive environment.
• Market Pulse - 2.55 pts - risen 0.2 pts from the past month and has risen 3.6 pts from this time last year. Rising due to the surge in contracts and low listing activity.
• Climate Index - .96 pts - $4m-Max Climate Index - 0.96- up 5.5% from last montha & 108.7% from last year. It is a much easier market than last year for sellers. Caviat- price correctly.

Macro Market News

Last week, the Federal Reserve delivered a much-anticipated 25 basis-point rate cut. While this was a positive signal, Fed Chair Jerome Powell tempered optimism, signaling a slower pace of rate cuts in 2025. Economists now project two cuts next year instead of four, meaning mortgage rates are likely to hover around 6% unless economic conditions change.

For sellers, this means acting decisively while demand remains strong. For buyers, the current climate offers opportunities to negotiate, especially on properties that have been sitting on the market.

Your Competitive Edge: Actionable Insights

For Sellers

With contracts up 72% year-over-year, this December is full of opportunity. Here’s how to capitalize:

• If You’re Getting Showings: Stay on the market. Buyers are active, and inventory is limited.
• If Your Listing Isn’t Moving: Take a step back and reassess using the 4 Ps:

1. Pricing: Are you competitively priced?
2. Presentation: Does your staging and photography grab attention?
3. Poor Marketing: Is your listing reaching the right buyers effectively?
4. Product Problem: Are there location or building challenges impacting buyer interest?

Sellers who adjust their price if buyer interest wanes are winning—41% of contracts closed last week included discounts, with a median reduction of 8%. Small changes can lead to big results.

For Buyers

The surge in contracts may have tightened your usual December advantage, but opportunities remain:

• Be Armed With Intel: Sellers know more than you about their property’s activity, feedback, and their own motivation. Do your research—study comps, property history, and seller flexibility to craft a strong offer.
• Negotiate Strategically: With 41% of deals receiving discounts, there’s room to negotiate—if you’re prepared. Focus on properties with higher days on market for better leverage.
• Think Long-Term: Evaluate whether the property you’re considering aligns with your financial goals. Some ultra-luxury and new development properties can be volatile—ensure your investment holds or grows its value over time.

Success in this market depends on preparation, strategy, and the ability to act decisively.

Introducing: Chart of the Week

This week, I’m launching a new feature: Chart of the Week. These charts highlight key trends shaping Manhattan’s luxury market, offering insights you can act on.

This Week’s Chart: The Pricing Penalty by Days on Market

Time on market is critical in Manhattan’s luxury market.

• Under 60 Days: Properties typically achieve [3]% of their asking price.
• 120+ Days: Pricing dips by an average of [14.5]%.
• Median : Sellers face an average pricing penalty of [11.3]%.

Curious to see the full data? Click here to view the chart.The Pricing Penalty chart highlights the median discount based on the time it takes to go into contract. Listings that enter contract in less than 60 days typically sell close to their asking price, indicating they are "priced right". In contrast, listings on the market for more than 180 days typically experience larger discounts—often reaching the level they would have achieved had they been priced accurately from the outset.

Whether you’re buying or selling, understanding the impact of time on market can mean the difference between success and stagnation.

Top 2 Contracts of the Week- See all 34 Contracts

#1 – 820 Fifth Avenue #3

• Asking Price: $29.5M
• Property: Prewar co-op, 6 bedrooms, 7.5 baths, 7,000 sq. ft. ($4,214 psf)
• Notable History: First time available in 60 years. Iconic residents include Babe Paley and Ken Griffin.
• Time on Market: 260 days

#2 – 944 Fifth Avenue #14

• Asking Price: $28.5M (reduced by $6M three months ago)
• Property: Prewar co-op, 4 bedrooms, 6.5 baths
• Notable History: Former home of Barbara Walters.
• Time on Market: 220 days

Conclusion

The 72% surge in contract numbers this December isn’t just a year-end highlight—it’s a signal of what’s to come. Buyers and sellers are moving decisively, laying the groundwork for what could be an incredibly active spring market in 2025.

For sellers, the opportunity is here and now—smart pricing, strong presentation, and adaptability can position you to capitalize on the market momentum.

For buyers, preparation is key. The most competitive buyers are those who understand the data, see the trends, and act with confidence and strategy.

The market is moving fast, but clarity and expert guidance can give you the edge you need to succeed.

Let’s talk strategy. Hit reply or contact me directly at [[email protected]]. Prefer a quick call or text - 917- 273-7787? Let’s find a time that works.

Until next week, may your real estate dreams become a reality.