New York Condo Prices Seem To Be Stabilizing
The third quarter saw another decline in the median sales price for co-op and condo properties in Manhattan. However, this decrease was less significant compared to previous quarters, suggesting a potential stabilization in prices.
According to the most recent Elliman Report, the median sales price for co-ops and condos experienced a year-over-year decline for the fourth consecutive quarter, dropping from $1,154,625 in the third quarter of 2022 to $1,150,000, a decrease of 0.4 percent.
This contrasts with the previous quarters, where the median sales price for Manhattan co-ops and condos saw more substantial declines: 4 percent in the second quarter, 9.7 percent in the first quarter, and 5 percent in the fourth quarter of 2022.
The report highlights that as listings continue to decrease, it is contributing to an increase in demand and, subsequently, price stabilization. Listings decreased by 6.1 percent compared to the same quarter last year, as many potential sellers held onto their properties due to the ongoing availability of low mortgage rates. With mortgage rates hovering around 8 percent, property owners are hesitant to sell if they need to secure financing for another purchase.
Year-over-year sales declined by 22.7 percent, and it is anticipated that this quarter represents the last period of distortion caused by the spike in mortgage rates from the previous year, according to the report.
Remarkably, the median sales price for Manhattan co-op properties increased to a new record on a year-over-year basis, marking a reversal after three consecutive quarters of annual declines. It rose by 2.8 percent to reach $875,000, even though the number of co-op sales decreased by 25.1 percent year over year.
The main contributing factor to these dynamics is the persistently low inventory. Listings have fallen annually for eight of the past nine quarters, maintaining a tight market despite the rise in mortgage rates. Jonathan Miller, the president and CEO of appraisal firm Miller Samuel and the author of the report, notes that this situation mirrors the broader U.S. housing market, where a scarcity of supply has led to record prices in various markets, including co-ops.
Co-op properties stand out in this context because new developments tend to be condos, and listings for new condo developments experienced a more significant year-over-year decline. Consequently, the median sales price for condos dropped by 1.1 percent to $1,610,000.
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