Manhattan Co-Op and Condo Sales Drop, Prices Rise a Bit

The first quarter of 2024 is on the books, and there are three takeaways for Manhattan's co-op and condo market: sales volume was down sharply from a year ago; prices were up slightly for co-ops and newly constructed condos; and cash is still king, thanks to the Federal Reserve's inflation-fighting interest rate hikes.

The number of sales of Manhattan co-ops and condos dropped to 1,988 in the first quarter of 2024, Crain's reports. That's an 11% dip from the year-ago quarter and a 17% plunge from the last three months of 2023, according to new market data from Douglas Elliman. It’s the first time the number of sales has slid below 2,000 in three years, the brokerage said.

The median sale price for co-ops showed improvement over 2023 levels, posting a gain of 2% to reach a median sale price of $815,000, while the price of luxury homes, which represent the top 10% of the market, climbed nearly 3% over the 2023 median to $5.8 million. This marked the fourth consecutive quarter with a year-over-year price increase at the high end of the market. Luxury listing inventory also increased on a yearly basis, the first time it’s done so in four quarters, according to the report. There were 1,628 active luxury listings in the first quarter, a 9% annual increase and 16.5% higher than the final quarter of 2023. 

The most notable bright spot, though, was with new developments, which are essentially freshly built condos. Even though their sales slowed, the units that did trade managed to command strong prices. In fact, they scored a median of $2.1 million last quarter, or $2,400 per square foot, a 31% surge over the first quarter of 2023.

Which brings us to the effect high interest rate are having on sales. “The market is still highly dependent on cash sales,” appraiser Jonathan Miller, the author of the report, tells The Real Deal. Cash sales accounted for 63% of deals closed in the first quarter of 2024, marking the third highest share since Miller started tracking the metric a decade ago. On an annual basis, cash deals rose 1.5%, while mortgage-related transactions dropped nearly 27%

After hitting a recent peak of 8% in October, the average interest rate for a 30-year mortgage has come down to 7%. But that loan cost is still well above the 4% rate attainable in early 2022, before the Federal Reserve began hiking interest rates in a bid to rein in inflation. The Fed has recently begun holding the line on hikes and even promised to lower rates this year. Still in the fourth quarter the number of all-cash deals, perhaps unsurprisingly, was the third highest on record.