Is Manhattan's Real Estate Market Shifting Back Towards Sellers?

Michael Holt  |  March 8, 2024

Holt's Monthly Market

Is Manhattan's Real Estate Market Shifting Back Towards Sellers?

Is Manhattan's Real Estate Market Shifting Back Towards Sellers?

The market dynamics are undergoing a transformation. In recent weeks, there has been a noticeable resurgence of liquidity in line with the expected seasonal pattern for the Spring active season. However, this shift stands out due to the unique backdrop that precedes it.

Throughout the course of 2023, several trends have shaped the current landscape:

  1. There has been a gradual decline in Contract Activity.
  2. The Listing Climate has experienced a progressive downturn.
  3. Price Action has seen a decrease of around 10%.

Interestingly, despite these trends, Supply has remained relatively low compared to previous years. Taken together, these factors create an environment where the advantages of leverage can change rapidly with the resurgence of buyer activity. This appears to be the prevailing trend at present.

In summary, it seems that the peak leverage for buyers has passed. Consequently, buyers should recalibrate their expectations accordingly. While it's not yet a seller's market, the current conditions lean more towards neutrality compared to the buyer-friendly environment of just a few months ago.

The UrbanDigs Market Pulse Suggests a Neutral Marketplace

This market indicator, adjusted for seasonal variations, examines supply and 30-day contract activity trends to gauge the direction of leverage advantages. It's evident that we're transitioning from a buyer-dominated market to a more balanced and neutral marketplace. 

Market Pulse

Showing Market Pulse for any bedroom configuration in All of Manhattan for all prices. The chart shows how current supply (available properties) and demand (sales speed) compare to typical seasonal levels. If the value is positive, the market is doing better than usual; if negative, it's doing worse. This information helps to determine if the market favors buyers or sellers and how that leverage trend may be shifting.

An End to the Tough Listing Climate?

Sellers have endured a prolonged and arduous journey, but signs of improvement are finally emerging. Recent data indicates a potential upturn, indicating that the listing environment indicator has likely weathered the worst of its challenges and is poised to improve in the coming months.

Climate Index

Showing Climate Index for any bedroom configuration in All of Manhattan for all prices. This chart shows how favorable or challenging the listing environment is for sellers. It looks at the ratio of signed deals to listings removed from the market and as that ratio increases, the environment for listings is warmer, Conversely, as the ratio falls, the listing environment becomes cooler.

Prices In Manhattan Have Declined About 10%

Buyers may not be fully aware, but this market has already experienced a downturn of approximately 10% when comparing recent closed sales data to the peak values reached in Spring 2023. However, it's essential to recognize that this lagging indicator reflects the market's past conditions, specifically from late Fall. In the coming months, we'll observe whether this marks the bottom and if prices begin to rebound from these lows.

 

Price Per Square Foot - Manhattan

Showing Price Per Square Foot for any bedroom configuration in All Manhattan for all prices

Guidance for Sellers in Manhattan

Your prime listing window typically spans from March to June. Despite the decline in prices throughout 2023 and the recent sales data reflecting deals from late last year, there are indications that today's markets are beginning to show signs of recovery. Presently, the supply is limited, but this is anticipated to change as new listings enter the market in the coming months. Sellers should capitalize on this seasonal increase in contract activity and leverage, but maintain realistic expectations regarding price movements. While the market may have passed its lowest point, the recent improvements likely only partially offset the price decline, resulting in a balanced market, at best. Nonetheless, these conditions are shaping up to offer some of the most favorable listing opportunities for sellers since last Spring.

Guidance for Buyers in Manhattan

As previously mentioned, we believe that the peak advantage for buyers has passed. However, you still benefit from favorable price action compared to last year, along with early insight provided by this report regarding market changes. While you haven't missed out yet, sellers you encounter may not respond in the same manner as they might have a few months ago. This creates an asymmetry in information where sellers possess more knowledge, including traffic levels, bidding interest, price flexibility, and time constraints. In contrast, buyers rely on observational data and insights from real estate professionals to make informed decisions. Anticipate increased competition among buyers and less flexibility from sellers, especially for properties priced at market value. Deals are still attainable, but the sense of urgency has intensified. Expect this trend to persist, with leverage shifting away from buyers over the next few months as we enter the peak activity season in Spring. Take reassurance in the likelihood that the market downturn of over 18 months leading up to now is likely reaching its nadir and starting to rebound. Adjust your approach accordingly.

Custom Strategies

In the ever-shifting terrain of the real estate market, it's crucial to have a seasoned navigator by your side. As a seasoned real estate broker with The Holt Team at Compass, I offer more than just transactional services. With a deep understanding of market trends, including the recent shift in leverage dynamics and emerging opportunities, we provide strategic counsel tailored to your unique needs. Whether you're looking to capitalize on favorable price action or navigate increased buyer competition, trust in our expertise to guide you toward informed decisions and successful outcomes. Reach out today to begin a conversation about how we can assist you in achieving your real estate goals with confidence.


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