In November 2021, 422 luxury Manhattan homes went into contract, a new record according online marketplace, StreetEasy.
Based on current prices, Manhattan’s luxury tier currently includes anything priced above $3.85 million.
Before November, there have never been more than 400 luxury sales in Manhattan in one month, according to StreetEasy records dating back to 2010. Prior to the pandemic, the record high was in July of 2019, when 307 contracts for luxury homes were signed.
Manhattan was the only one of the boroughs analyzed to see a month-over-month increase in pending sales between October and November, driven by these luxury sales. There were 1,406 contracts signed in Manhattan in November. That’s 26 more than in October, but down from the peak in April 2021, when 1,643 contracts were signed.
Why Are Luxury Homes Selling So Well?
There has been an uptick in demand for luxury homes after the pause on buying activity spurred by the pandemic. One plausible source of the demand is the fact that vaccinated international visitors were granted access to visit the U.S. as of November. StreetEasy economist Nancy Wu noted in her 2022 predictions that this trend will likely continue throughout the new year.
Another reason? The pandemic spurred some price cuts in the luxury sector. In April 2021, luxury prices fell to $3,643,000, the lowest they’ve been since July 2012. Lower prices, combined with sellers willing to negotiate and favorable mortgage rates, increased demand for these homes.
Manhattan Luxury Homes Sold Nearly Two Months Faster This Year
In addition to higher numbers of contracts being signed, luxury homes are also spending less time sitting on the market. The median luxury Manhattan home spent 75 days on the market in November. That’s 59 days faster than November 2020.
Luxury homes moved off the market at the fastest pace ever — 66 days — this past May. But prior to the pandemic, the median number of days on market for a luxury home had not been this low since the spring of 2016.
Uptick in Luxury Sales Is Driving Up Manhattan Prices
High demand for luxury homes has led to the borough-wide median asking price in Manhattan reaching $1,495,000 in November —- the highest it’s been since June 2020, and a 10.7% increase from a year ago. Manhattan asking prices have now been rising for the past five consecutive months.
Prices are rising across all price tiers. But luxury homes are seeing the most significant year-over-year uptick in prices with a 4.4% increase in November.
What Does This Mean for Those Without a Luxury Budget?
The majority of demand for homes right now is from buyers with a luxury budget. Prices for lower-priced homes in Manhattan are not rising quite as rapidly, or selling as fast, and fewer homes are selling overall.
On the whole, the sales market is following trends typically seen during the end of the year. That means less activity compared to warmer months and due to the holidays. In addition, many buyers wait to see more inventory in the spring.
“The news of rapid price growth can be alarming to prospective buyers, but this data could bring a sense of calm to many,” says StreetEasy economist Nancy Wu.
“There has been a massive glut of luxury inventory in Manhattan for a long time,” Wu continues. “Lower prices, combined with low mortgage rates, have finally started to change that. The market is much more rational now than it was a few years ago. Demand is very high. But unlike renters, who are facing an inventory shortage, buyers have lots of homes to choose from in New York City, which is welcome news.”
Read on for more on the latest in Manhattan, Brooklyn, and Queens.
Manhattan Rents Are Just $25 Shy of Pre-Pandemic Prices
The median asking rent in Manhattan rose to $3,475 in November — just $25 shy of the pre-pandemic high of $3,500.
In the sales market, as noted earlier, the median asking price of for-sale homes in Manhattan reached $1,495,000 in November, the highest since June 2020. This was a 10.7% increase from last year.
As far as inventory goes, there were 9,224 homes for sale in Manhattan in November. This is down 17.3% from last November, but is slightly above what we typically see during the fall (prior to the pandemic).
Of those for-sale homes in Manhattan, 8.5% of them received a price cut in November. That is the lowest share out of the three boroughs analyzed, and 3.3 percentage points lower than last November.
Brooklyn Rents Have Fallen Slightly Since the Summer
Renters interested in Brooklyn will see lower prices than what was on the market this summer. The median asking rent in Brooklyn was $2,600 in November. That’s an increase of 8.3% since last November, but down from $2,675 in September.
In the Brooklyn sales market, prices are remaining stagnant. The median asking price of for-sale homes in Brooklyn was $949,000 in November, the same as it was last year.
There were 5,224 homes for sale in Brooklyn in November. This is down 9.7% from last November, but is right on par with what we typically see during the fall.
Of those homes for sale in Brooklyn, 9.5% of them received a price cut in November. That’s down 3.1 percentage points from last November. The share of price cuts in Brooklyn peaked in September 2020, when 16.8% of homes saw a price cut.
Queens Is the Only Borough Analyzed to See a Drop in Sales Prices
Queens rents have been steadily increasing since March of this year. The median asking rent in Queens was $2,284 in November, up 8.8% from last year.
In the sales market, Queens was the only borough analyzed to see a decrease in asking prices. The median asking price of for-sale homes in Queens was $594,500 in November, down 7.0% from last year.
There were 3,350 homes for sale in Queens in November. This is a 4.6% increase from last year, and slightly higher than what we have seen during the fall in the past.
Of the homes for sale in Queens, 9.5% of them received a price cut in November. That’s down 2.2 percentage points from last November. The share of price cuts in Queens peaked in September 2020, when 15.9% of homes saw a price cut.