While huge swaths of the country enter the most severe buyer’s markets in over a decade, and Northeast suburban pockets continue to be starved for inventory, New York City has found itself caught somewhere between.
Across price points, the market is described by Brown Harris Stevens’ Jared Antin as “punishingly efficient.”
“Renovated, well-priced homes are actually selling into a quasi-seller’s market,” he said, while properties that haven’t been updated in a number of years, or are priced too high, “are stuck in a much larger sort of buyer’s market.”
The city’s market seems to diverge when split along the $4 million line, which marks luxury sale territory.
“Once you start looking through that lens of price, the markets become different,” said UrbanDigs co-founder John Walkup. In Manhattan, the under $4 million market has seen demand tick down 2 percent and supply up 2 percent year-over-year, indicating a slight uptick of leverage for buyers.
On the other side of that price line, “the appetite for luxury property seems almost unabated,” he said. Demand is up 6 percent and supply down 16 percent. Luxury homes’ median asking price in Manhattan rose almost 9 percent in the second quarter to $6.9 million, while the city as a whole saw an increase of 1.6 percent to $1.2 million, according to a report from Miller Samuel.
Cash and international buyers, which often are one and the same, are the biggest drivers of the sustained demand for luxury homes in the city. In the second quarter, a record 69 percent of transactions were all-cash, according to Miller Samuel’s report.
An analysis by The Real Deal found that foreign buyers doubled in the first half of this year compared to last year, driven in part by the weakening U.S. dollar.
Brooklyn has seen a similar effect. A number of luxury properties in the borough have set price records in recent months, and in the second quarter, the borough saw its share of bidding wars on closed homes increase from over 18 percent to over 22 percent.
“There are strong properties commanding strong pricing if they’re turnkey and rare in terms of the location and availability,” said Douglas Elliman’s Frances Katzen. “Buyers have more leverage in the mid-range in properties that need work, or areas that are not as highly demanding.”
Timing counts
The summer is also a difficult time to evaluate the market, where new listings plummet and buyers have dissipated for weekend travel.
“It’s been years since we’ve seen anything that would resemble a seller’s market in July and early August,” said Keller Williams’ William Krooss-Tadas.
But he said he has seen a surprising amount of activity in the dog days of summer, giving him optimism for what the fall market could hold.
Although talk about hopes around mortgage rates falling feels less like beating a dead horse and more like unearthing its decayed carcass, agents still point to financing costs as the single biggest factor in incentivizing more buyers to enter the market.
But Walkup said he’s not ready to jump on the mortgage rate bandwagon yet, given the last interest rate cut in September 2024 saw mortgage rates actually rise. The Federal Reserve’s expected cut in September could spark another tricky listing environment.
“I’m wondering how existing sellers who are still trying to sell are going to compete, and I’m wondering how the new sellers, who’ve been sort of watching from the background, are going to position their units,” he said.
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