High-rise luxury apartments are showcased across Central Park South near Columbus Circle in New York’s Manhattan borough.
Robert Nickelsberg | Getty Images
Sales of Manhattan residential properties topped $7 billion in the first quarter, marking the strongest start to a year ever as the market shows no signs of slowing, according to new sales data.
There were 3,585 sales in the first quarter, the highest number ever in the first quarter, according to a report by Samuel Miller and Douglas Elliman. That’s a 46% increase from the first quarter of 2021. Total sales rose 60% to more than $7.3 billion, as lower inventory also fueled continued price growth.
The median apartment price in Manhattan jumped 19% over the past year period, to $2,042,113.
The strength came despite higher interest rates, concerns about a possible recession and falling stocks, which tend to have a significant impact on Manhattan’s real estate market given the city’s reliance on the financial industry.
The pressure to return to the workplace does not appear to be driving the increase either. Only about 36% of New York workers have returned to the office, according to data from Kastle Systems.
The assumption that people live in Manhattan because of their jobs is now being challenged, said Jonathan Miller, CEO of Miller Samuel, an assessment and research firm.
“You have a lot of people who work remotely, but they want to be in Manhattan,” he said. “They are drawn to cultural shows, restaurants, Broadway. Telecommuting doesn’t just mean the suburbs. There can be as many people working remotely in Manhattan’s Upper East Side as there is in Westchester.”
Higher interest rates also have less of an impact on wealthy buyers, who dominate the Manhattan market. As prices go up, they simply pay more cash. More than 47% of all property purchases this quarter were all cash, up from the pandemic low of 39%, and closer to the historical norm.
Supply was another reason Manhattan’s strength at the start of 2022. While the rest of the country struggles with a shortage of homes for sale, Manhattan still has ample inventory, although it is declining. Nearly 5,000 listings came to market this quarter, the most of any first quarter ever, according to Corcoran. However, for the first time in five years, inventory has fallen below 6,000 units.
“With strong sales and improved pricing, barring any unexpected shocks, this fantastic first quarter should feel very optimistic about another significant year ahead,” said Pamela Lippmann, President and CEO of Corcoran.
The question is how far Manhattan prices can rise before buyers start pulling back on deals. The median apartment price in Manhattan hit an all-time high of $1,190,000 in the first quarter. The average price for a new development was $2.3 million.
The biggest price gain is at the top. Prices for apartments of four bedrooms or more jumped 31% over last year, to $6.5 million. Due to price hikes by buyers, only 20% of apartments sold for less than $1,200 per square foot were sold, the lowest percentage ever, according to Corcoran.