The Pulse - Manhattan Luxury Market 7/15/24

Defying the Seasonal Summer Slowdown:$4M & Over Market Remains Strong!

Welcome to this week's Pulse, where I bring you the latest insights and data from the high-end real estate market. Here’s what you need to know!

Market Highlights:

• Contracts Signed: 21 contracts were signed last week, just one less than the previous week, marking a 4.5% decrease. Despite this slight dip, the market remains robust with 20 contracts as the benchmark for a healthy market. Year-to-date, we are on par with last year with 46 signed contracts.
• New Listings: Post-holiday, we saw a surge in new listings with 47 hitting the market last week, a significant 177% increase. However, compared to this time last year, listings are down by 13%, reflecting a continuing trend of low inventory.
• Market Pulse: The Market Pulse index has risen by 0.8 points over the past month and compared to the same time last year, indicating a slightly stronger market favoring sellers.

Property Types Performance:

• Condos: As usual, condos dominated the market with 15 contracts, capturing a 71% market share.
• Townhouses: The townhouse segment performed strongly with 4 contracts, representing a 19% market share. This is notable considering townhouses only make up 2% of the housing stock.
• Geographical Insights: Downtown continues to lead with a 48% market share, followed by the East and West Sides, each with a 19% share.
• New Developments: New developments held a 24% market share, showcasing their ongoing appeal.
• Ultra-Luxury Segment: The $10M and over market saw a significant surge with 7 contracts, representing a 33% share. Noteworthy transactions include the Aman penthouse at 730 Fifth Avenue, which sold for $135M, and King Charles purchasing a condo at 111 W 57 in Billionaires Row.

Macro Market and Geopolitical News:

Inflation cooled broadly in June to the slowest pace since 2021, driven by a long-awaited slowdown in housing costs. This sends a strong signal that the Federal Reserve might cut interest rates soon. During his testimony before lawmakers, Chairman Powell avoided signaling the timing for a cut, but financial markets predict a 90% chance of a cut by September.

Presidential election years typically impact the luxury market, with Manhattan often pausing before surging post-election. Internationally, significant elections in France and the UK could affect luxury real estate. In the UK, a Labour Party win may increase property taxes, potentially raising the stamp duty for overseas buyers and reversing the capital gains tax from 28% to 24%. In France, the wealthy are exploring moves abroad due to election outcomes. In the US, speculation about Trump winning and passing tax cuts could trigger inflation to rise.

Luxury Lifestyle News:

Ivy League social clubs are losing their appeal to cooler membership clubs that offer better food and rooftop pools, according to WSJ article

Seller and Buyer Advice:

For Sellers: The market is bucking seasonal trends, providing some leverage. However, correct pricing is crucial, and each neighborhood and building have their own micro markets—know your specific market well. Need advice or have questions about this complex market? Watch My YouTube Video for Tips on Selling and Subscribe to My Channel for ongoing insights.

For Buyers: There are opportunities to purchase properties listed below their purchase price. Urban Digs, a real estate data research specialist, indicates that as many as 10% of new listings on the market fall into this category.Please review the chart in the chart box below . Check Out My YouTube Channel for Buyer Advice and Subscribe for the Latest Updates to stay ahead.

Top 2 Contracts: See all 21 contracts

• #1 - 83 Horatio St: Townhouse asking $22.95M - 5 bedrooms, 5.5 baths, 6,220 sq ft, $3,689 psf, 106 days on market.
• #2 - 212 W 17 Walker Tower: Asking $15.995M - 3 bedrooms, 4 baths, 3,071 sq ft, $5,208 psf.

Conclusion:

Despite the typically slower summer season, the $4M and over market is proving its resilience with steady activity and a healthy number of contracts. As we move forward, keep an eye on macroeconomic indicators and their potential impact on the market. Whether you're looking to buy, sell, or simply stay informed, our team is here to provide you with the expertise and insights you need.

Thank you for tuning into this week's Pulse. Stay tuned for more updates and have a wonderful week ahead! May all your real estate goals and dreams become a realty!