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Dear Clients and Friends,
The May 2024 market pulse increased slightly from the prior month (as predicted) due to a small uptick in signed contracts and small downtick in new listings as the spring season begins to peak. While the pace of sales is stronger than it was at the beginning of the year, we are witnessing a relatively ‘flat’ market, with one week up, and one week down in contracts signed. This trend can be seen in the percentage of new listings entering contract within the first 30 days on the market (currently ~10%). At the end of 2015 (the height of the NYC residential market) ~25% of new listings entered contract within the first 30 days, eventually falling to 5% at the NYC market ‘bottom’ of 2020. Since recovering in 2021, we have hovered around 10%.
Many buyers and sellers (particularly those without a ‘need-based/life-event’ reason to move) are looking to interest rates as one metric for a ‘push’ to transact. In 1Q24 ~63% of Manhattan sales were all-cash (the third highest percentage in over a decade). Although cash transactions were more concentrated at the upper price points and in coops that require greater buyer liquidity, they remained notably high across the board. If mortgage rates show signs of moderating this September/Fall (as many expect) it could put upward pressure on pricing and the impetus to transact.
The NYC luxury market (homes priced above $4M) had healthy performance with 118 contracts signed in May, up from the 101 signed in April. The City also demonstrated its continued position as a key location for top-tier residences. Based on the Knight Frank 1Q24 Intelligence Report, sales volume for properties over $10 million in 11 global markets (New York, Palm Beach, Miami, Los Angeles, Orange County, London, Paris, Geneva, Dubai, Hong Kong and Singapore) was down 12% YoY. New York, however, showed sales volume growth in this $10M+ category and occupied the second highest spot on the list after Dubai.
Lastly, in other relevant news about the longevity of NYC as a live/work destination, approximately 3 million SF of office space was leased in May -- a 70% increase YoY (though it should be noted that a few mega-deals were responsible, notably Bloomberg’s lease extension at 731 Lexington Avenue, which was the largest deal since 2019).
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