In Manhattan, Cash Is King

Through the first seven months of this year, more than one-third of co-op sales and more than half of condo sales in Manhattan were all-cash, real estate appraiser Jonathan Miller reports in Curbed.

Mortgages were shunned by 35 percent of condo buyers and 56.5 percent of condo buyers. Townhouses priced above $5 million were bought with cash in 91.7 percent of sales.

“What was actually surprising,” Miller writes, “is that the use of cash fell slightly across the board by segment as credit eases nominally. The outlier was located in the $3 million to $5 million market, just below the cutoff where the market has weakened sharply. The drop in cash use was significant in the $2 to $3 million segment, where lenders seem to be especially comfortable, allowing the use of financing to expand.”

He adds, “This slip in the use of cash suggests that credit is improving slightly, a trend that will hopefully continue over the next several years. There is a long way to go before we see more rational lending standards, but housing in NYC won’t truly normalize until credit conditions return to sanity and cash is not necessarily king.”