Get Ready for a "Year of Disappointment" in Co-op and Condo Sales

Manhattan's residential market ended 2022 with a whimper, as median sale prices for co-ops and condos fell 5.5% compared to 2021, notching the first pandemic-era decline, the Real Deal reports. Tight inventory and high mortgage rates promise little relief for buyers or sellers during the coming year. 

There were 2,546 condo and co-op sales in the borough last quarter, down 28.5% from the fourth quarter of 2021 and down 31% from 2022's third quarter, according to data from Douglas Elliman as reported by Crain's. 

The slow quarter is a prelude to what looks like a "year of disappointment" in the housing market for 2023, according to Miller Samuel CEO and author of the report Jonathan Miller. Sellers will be upset about prices coming down, he says, while buyers will be upset about prices not coming down enough, leading to disappointment across the board and not very many deals.

"Buyers aren't going to get that boost in affordability that a rate cut would bring," he says. "And sellers aren't going to get the prices that they got in 2021, so no one's happy."

Rising interest rates stifled fourth quarter sales in Manhattan, which fell 28% year-over-year. Meanwhile, cash buyers rose to a record share of deals, notching 55% of fourth-quarter transactions as more buyers avoided high borrowing costs.

Signed contracts were also down across all property types year over year in Brooklyn, falling 25.6%, from 125 to 93, for co-ops and 57.9%, from 235 to 99, for condos. New listings similarly dropped across the board, falling from 99 to 62 for co-ops and 134 to 119 for condos. That's a good definition of tight — and tightening — inventory. Happy New Year!