The Pulse - Manhattan Luxury Market 9/17/24
Pulse
Pulse
$4M & Over Manhattan Contracts Drop 17% - What's Behind the Numbers?
Welcome to this week's edition of the Pulse, your go-to source for the latest insights into Manhattan's luxury market. This week, contracts for properties priced at $4 million and above dropped by 17%, with only 20 contracts signed in the second week of September. Before you raise any alarms, let's delve into the reasons behind these numbers.
The dip isn't unexpected. Typically, there's at least a two-week gap between an offer and a signed contract. Most of the offers for last week's contracts were made during late August and over the Labor Day weekend—historically the slowest times of the year. September is usually a low-volume month for contracts, primarily reflecting the sluggish market activity in August. However, don't let this deter your confidence. October is just around the corner, and it’s traditionally the month with the highest deal volume, mirroring the robust buyer activity in September.
Despite the weekly drop, there's a silver lining: September contracts are up by 16% compared to the same time last year. This uptick indicates a stronger market presence than we've seen previously. So, while the immediate figures might seem concerning, the long-term trajectory remains positive.
New listings coming onto the market dropped by 10% from the previous week, and new inventory is down 12% compared to the same time last year. While we might seem to be coming in light, remember that the listing season hasn't hit full gear yet. We're poised to see a resurgence as the season progresses.
Condos continue to dominate the market with a commanding 65% share.
Downtown, as usual, led with 35% of the market share, though this is lower than typical figures. Interestingly, the Upper East Side is making waves with a 30% share. This area is experiencing a renaissance, thanks to new developments that offer classic architecture paired with modern amenities. These new projects are drawing in buyers from downtown who seek a blend of luxury and convenience, especially those wanting proximity to top schools.
New developments also had a strong showing, taking up 40% of the market share. The $10M and over market performed well, holding a 20% share, signaling continued interest in high-end properties. Four properties had discounts, with a median discount of 16%, indicating that while the market is strong, there’s room for negotiation.
The Market Pulse now stands at 1.3, up by 0.6 points from the past month and 1.4 points from this time last year, showing a steady upward trend. On the macroeconomic front, stocks closed on a high note on Friday in anticipation of the September 18 Federal Reserve meeting, where a rate cut is expected. Many are betting on a 25 basis point cut, with the possibility of two additional cuts this year. This potential easing could bode well for the real estate market, making it more accessible for buyers.
1. 170 E 80 Townhouse - Asking $17.995M
2. 170 East End Avenue - Penthouse Resale Condo
Don't be alarmed by the recent drop in contracts; this is a typical seasonal trend, and the market is poised to pick up. This fall looks more promising than last year, thanks to mortgage rate cuts and the anticipated Federal Reserve rate cut. However, it's important to keep in mind that prices haven't risen significantly. To ensure a successful sale, it's crucial to have up-to-date comparables and comprehensive intel on your property's specific sector. Every building and neighborhood in Manhattan is a micro-market with unique dynamics. Presentation is key—make sure your property shines online to capture the right buyer's attention.
Inventory is lighter this September compared to last year, creating a more balanced market rather than a buyer’s market. This presents unique opportunities, especially if you're strategic. Properties that have been on the market for over 100 days or those needing renovations can offer great value. Additionally, some new developments are offering discounts and incentives to buyers to accelerate sales, making this a prime time to explore these options.
In the world of luxury real estate, setting the right price is crucial for attracting the right kind of attention. But what happens when a property becomes the subject of a pricing rollercoaster? Let's delve into a case where ambitious pricing led to unexpected pitfalls, and explore key lessons to avoid similar mistakes.
When this property first hit the market at an eye-popping $90 million, it was intended to create a buzz—an aura of exclusivity and unparalleled luxury. Instead, it attracted a different kind of buzz, one of skepticism and disbelief. The initial headline price was like a mirage in the desert—grand and enticing from afar, but evaporating upon closer scrutiny. Buyers were left questioning the value, seeing it as an ambitious leap rather than a reflection of the market reality.
Realizing the initial sticker shock, the price began its descent—a classic case of "Yo-Yo Pricing." It dropped to $75 million, then $70 million, and down to $65 million, each reduction signaling to the market that the original price was not rooted in reality.
Read more to discover how this rollercoaster ride continued and the key lessons sellers can take away to avoid similar pitfalls.
Both buyers and sellers need to stay informed and strategic in this dynamic market. Sellers should focus on presentation and accurate pricing, while buyers should be ready to act on unique opportunities that arise. The market is gearing up for a robust fall, so staying proactive and informed will be key to achieving your real estate goals.
What are your thoughts on this week's market trends? Share in the comments or reach out for a personalized market analysis. Please share the Pulse with others. If you would like some additional real estate tips watch my videos and subscribe to my You Tube channel.
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.
