The Pulse - Manhattan Luxury Market 9/2/24

The $4M and over luxury Manhattan residential real estate market saw a 19% drop in contracts last week, a typical trend for this time of year. However, August delivered a pleasant surprise with a 19% increase in signed contracts compared to last August, indicating strong underlying market dynamics. Welcome to this edition of the Pulse. Let’s explore the key factors behind these numbers and what they mean for you.

Key Takeaways: 19% Surge in August Contracts

• Contracts Signed: 13 contracts were signed last week, reflecting a 19% drop from the week prior.
  
  
• August Surge: Contracts in August surged 19% compared to last August, signaling renewed market activity.
  
  
• New Listings: New listings increased by 25% last week, an unusual move for this time of year, though overall August inventory was down 28% from the previous year.
  
  
• Property Types Overview: Condos led the market last week with a 62% share, reaffirming their status as the preferred choice among luxury buyers.
  
  
• Neighborhood Breakdown: Downtown claimed the highest neighborhood market share at 39%, followed by the Upper East Side and Midtown, both at 31%. The Upper West Side saw no contracts last week.
  
  
• High-End Market: The $10M and over segment performed impressively, capturing a 39% market share.

Economic Insights: What’s Fueling the Market?

The Federal Reserve has strongly signaled an upcoming rate cut in September, likely by 25 basis points. This could place rates in the 4.25% - 4.5% range by December, according to the CME Fed Rate Watch Tool. Mortgage rates, which have been gradually declining in anticipation of this, may see a further decrease post-September. The stock market, meanwhile, closed out August on a positive note, adding to the optimism in the real estate market.

Top 2 Contracts- See All 13 Contracts

220 Central Park South ( Most profitable condo in Manhattan) #39A

• Details: 3 bedrooms, 3.5 baths, 3,114 sq ft
• Asking Price: $34.5M ($11,078 psf)
• Market Time: 320 days
• Previous Sale: Sold for $22,808,800 in 2018
• Potential Gain: If sold at $30M, the seller stands to gain 32% on their investment.

217 W 21 Townhouse

• Details: 18,000 sq ft, fully renovated
• Asking Price: $29M ($1,611 psf), reduced by $5M two months ago
• Market Time: 274 days

My Market Perspective: What It Means for You

The 19% surge in August contracts compared to last year signals a strengthening market as we approach the fall. Coupled with a 28% drop in new listings for August, the supply-demand ratio has improved by 0.9 points from last month and last year. Both my colleagues and I have observed an increase in buyer activity, spurred by declining mortgage rates and the anticipation of further cuts in September.

For Sellers: August’s lower inventory gave you leverage, but this could diminish if more listings flood the market in September. Ensure your pricing and presentation are on point to stay competitive in the fall. Need help assessing your strategy? Let’s talk.

For Buyers: The fall market kicks off after Labor Day. Focus on properties priced correctly, and don’t overlook those that have lingered on the market for over 100 days—they might present strong negotiation opportunities. Curious about how to navigate the upcoming market shifts? Reach out to me here.

Conclusion

As we transition into what could be a very active fall market, both buyers and sellers need to be strategic. With the market dynamics shifting, understanding where the leverage lies—whether in price negotiation or market timing—will be crucial to making informed decisions. Keep an eye on inventory levels and economic indicators, as they will continue to shape the opportunities ahead.

Have any real estate questions or need advice navigating this changing market? Reach out to me here.

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

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