Manhattan has been experiencing a buyers’ marker since the summer of 2022, a new report argues, but the winds are about to shift.
While homesellers in Manhattan are facing an unusually challenging market, a new report suggests that buyers are encountering a surprisingly opportune time to purchase property in one of the nation’s most expensive markets.
The report, shared with Inman by the real estate analytics firm UrbanDigs, argues that potential buyers are at an advantage in Manhattan right now, with sellers contending with an exhausting period of low activity that is poised to result in better deals for buyers.
That buyers’ market is bound to end soon though, the report states, as seasonal activity looks bound to pick up amid decreasing mortgage rates.
While the prevailing narrative in the Manhattan market — as well as much of the nation — for the past 18 months has been a dire lack of inventory, more recent trends suggest that narrative is beginning to change, the report’s author told Inman.
“We started looking at the data and we started seeing contract signings in November and December were slightly higher than they were last year,” said John Walkup, co-founder of UrbanDigs. “Price per square foot started to show a little bit of a bounce up, so all of the stuff we’ve been reading about, hearing about, this low volume, perhaps that narrative might be running out of steam and we might be on the upswing of something new here.”
The report found that prices in Manhattan have fallen roughly 10 percent since their peak in April of 2023 when viewing price-per-square-foot trends in Manhattan’s condo resale market. The report’s authors anticipate a seasonal uptick once winter turns to spring, meaning now is the ideal time for buyers looking to take advantage of falling mortgage rates.
The report also found that liquidity is low and falling further to three-year lows for the measure of demand.
“While fewer buyers are stepping up, those who do purchase in low-liquidity markets tend to look back favorably versus buying in highly liquid, active markets where fewer discounts and leverage are being offered,” the report’s authors wrote.
For sellers, the current environment in Manhattan is undeniably tough, according to UrbanDigs’ listing climate index. When more listings are successful and are going under contract, the index rises. However, the index has been in a progressive decline since the spring of 2023. By that logic, buyers should be in the prime position to take advantage, the report argues.
“It is a tough environment for sellers, and it’s been this way for the majority of the last 19 months,” the report reads. “Flip that around, and you have a moment in time that offers opportunity for willing and able buyers.”
The report states that Manhattan has been experiencing a long-duration buyers’ market since the summer of 2022 — albeit a challenging one — but that seasonal trends and changes in mortgage rates could very quickly shift the favor back to sellers, with the report predicting seasonal activity to start picking up in February.
“The leverage window for buyers should remain open for another few weeks and then will likely fade as activity picks up,” the report reads.