The Manhattan residential sales market fluctuates in response to a variety of factors, both internal and external, as do many other economic landscapes. The recent data underscores a transitional phase marked by a rise in seller challenges and a simultaneous uptick in buyer opportunities.
July 2023: $1,427
August 2023: $1,444
- But this uptick doesn’t tell the whole story because sales data lags behind real-time market conditions. The delay is due to the time gap that occurs between the signing of a contract and the official recording of the sales price. This can sometimes take several months. This delayed data is like using the rearview mirror in order to navigate. It reflects past conditions, not current ones. Sellers basing their pricing strategy on such historical data might find themselves misaligned with the prevailing market sentiment, risking either overpricing or underpricing their listings.
- Lagging Sales Data
- If we break down the recorded sales that make up the months of June, July, and August, it’s obvious that the sales are mostly deals done two months prior. The sales in June reflect the activity of April, those in July reflect that of May, and those in August reflect that of June. This is a backward-looking approach. This may work while the market moves in one direction, but when the data is slow to reflect real-world changes, buyers and sellers diverge.
The Sales Lag Visualized | Contract signed dates for units closed each month with median sales price
per month shown on the median contract signed date for that month
Also, notice that the number of deals signed at or above $3,000 per square foot has fallen each month, a sign that luxury activity, typically a bellwether for Manhattan, has abated. Taken together, the decline in contract price per square foot and the shrinking number of “big” deals suggest a market actively contracting.
Contract Prices Lead Sales Prices | Median monthly sales prices by month of contract signed along
with median last asking price
There are three reasons, in particular, that underscore the shift in the market.
Contract Activity Breaks Lower
Liquidity, or the 30-day rolling window of contract activity, is setting new lows, typically a signal that sellers may be more open to lower bids as buyer activity fades.
Manhattan Liquidity Pace Chart
The Climate Index Cools
Sellers’ Listing Success Rate Wanes
Yet, for all its challenges, the market isn’t entirely bleak, especially for discerning buyers. The market offers some good value to those who are willing and able to make concessions and invest in interventions. For motivated buyers, now is the time to act, as you have more choice, leverage, and less pressure than usual during a typically busy season. For motivated buyers, this is the time to act, as you have choice, leverage, and less pressure than usual during a typically busy season.
Advice for Buyers
The present landscape is a window of opportunity for buyers to influence sellers to meet their terms. Due to the triple challenge of declining liquidity, decreasing listing success and a changing climate, sellers who are desperate will be more open to negotiations. The key is to strike a judicious balance between assertiveness and pragmatism, ensuring the deal doesn’t slip through.
Buyers Have the Advantage
The Manhattan residential sales market, like many economic landscapes, ebbs and flows in response to a myriad of internal and external factors. The recent data underscores a transitional phase marked by a rise in seller challenges and a simultaneous uptick in buyer opportunities.
Sellers are advised to remain nimble, frequently reassessing their strategies in line with emerging market trends. The data shows that buyers are in a better position than sellers, with more options and greater negotiation power. As with any phase of transition, the trajectory of the market is not fixed. Participants and professionals need to be vigilant in adapting to market shifts, particularly as they impact hyper-local areas. Both buyers and sellers will benefit from understanding these trends and taking action.