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Buyers didn’t seem to be in a buying mood in the winter, despite predictions of an active start to the year. A recent culprit for the market’s swoon, stubbornly high interest rates, are likely to blame this go-around as well.
The number of sales of Manhattan co-ops and condos dropped to 1,988 in the first quarter of 2024, 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.
Prices fell too three months after notching near-record highs. The median sale price was nearly $1.1 million, down more than 2% in a year and 9% from the fourth quarter, when it was just below $1.2 million, according to the data, which was prepared for the firm by appraiser Jonathan Miller.
With inventory levels slightly lower than they were in early 2023, buyers still don’t seem to have a lot of homes to choose among, suggesting current owners remain unwilling to put their homes on the market and give up favorable interest rates. 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, Elliman said.
Deal activity declined across the board for co-ops and condos; high-end luxury sales; resales; and new developments. But price-wise, the picture was a bit more mixed.
Co-ops showed improvement over their 2023 levels, posting a gain of 2% to reach a median sale price of $815,000, Douglas Elliman said. And the price of luxury homes, which represent the top 10% of the market, climbed nearly 3% over the 2023 median to $5.8 million, according to the brokerage.
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.
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C. J. Hughes , 2024-04-04 14:48:05
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