Rising inventory and shifting seller expectations have given homebuyers the upper hand in Manhattan, according to Douglas Elliman’s latest quarterly report.
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Rising inventory and a slowing list-to-sale timeline transformed Manhattan into a homebuyers’ haven during the second quarter, according to Douglas Elliman’s second quarter Elliman Report.
From April 1 to June 30, the median sales price in Manhattan declined 1.5 percent year over year to $1.18 million, while the average sales price declined 3.3 percent to $2.0 million. The decline in median and average sales prices comes from an increase in inventory, which rose for the first time in five quarters by 4.2 percent annually to 8,044.
The boost in inventory, which brought Manhattan to 9.2 months of supply at the current sales pace, has given homebuyers some reprieve. The market share of bidding wars decreased 5.2 percent from 7.6 percent in Q2 2023 to 7.2 percent in Q2 2024. Of the homebuyers who found themselves in a bidding war, they paid 2.5 percent above the asking price — a whopping 68 percent decline from the 8 percent premium they paid in 2023.
Miller Samuel CEO Jonathan Miller, who contributed to the Q2 Elliman Report, said current market trends reflect homebuyers’ and homesellers’ adjustment to a higher mortgage rate environment. Sellers, he said, have adjusted their pricing expectations to move their listings off the market, and homebuyers are gravitating towards purchasing as median rents in Manhattan reached a high of $3,600 in June.
“The buyers and sellers resolve is weakening,” Miller told CNBC on Wednesday. “At a certain point, they can only wait so long before they feel like they have to make a move. If people were sitting on the fence, the high rents maybe helped push them into the sales market.”
Homebuyers favored co-op and condo markets during the second quarter, with sales rising 18.0 percent and 5.7 percent year over year, respectively. The median sales price for co-ops rose 1.8 percent to $800,000, while the median sales price for condos rose 3.4 percent to $1.7 million.
Meanwhile, the luxury market softened during the quarter despite a 22.4 percent boost in inventory and a 10.5 percent decline in median sales prices to $5.99 million. Miller said political upheaval and concerns about Wall Street moving towards a bear market have led to weaker sentiments among wealthy homebuyers.
“With the high end, this weakness could be the beginning of a trend or just a one-off,” Miller told CNBC. “We will have to see what happens in the second half.”
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