Luxury high-rise apartments are viewed across Central Park South near Columbus Circle in the New York City borough of Manhattan.
Robert Nickelsberg | Getty Images
Residential sales in Manhattan topped $7 billion in the first quarter, marking the strongest start to the year ever as the market shows no signs of slowing, according to new sales data.
According to a report by Miller Samuel and Douglas Elliman, there were 3,585 sales in the first quarter, the highest number ever for a first quarter. That’s up 46% from the first quarter of 2021. Total sales volume rose 60% to more than $7.3 billion as declining inventories also led to continued price increases.
The median price of an apartment in Manhattan rose 19% from the same period last year to $2,042,113.
The strength came despite rising interest rates, concerns about a potential recession and falling stocks, which tend to have an outsized impact on the Manhattan real estate market given the city’s reliance on the financial industry.
It also doesn’t look like the urge to return to work is driving the rise. According to data from Kastle Systems, only about 36% of New York workers have returned to the office.
Jonathan Miller, CEO of Miller Samuel, the ratings and research firm, said the notion that people live in Manhattan for work is now being questioned.
“You have a lot of people who work remotely but want to be in Manhattan,” he said. “They are attracted to the cultural offerings, the restaurants and Broadway. Remote work doesn’t just mean the suburbs.
Rising interest rates are also having less of an impact on wealthy buyers, who dominate the Manhattan market. When prices go up, they simply pay more cash. More than 47% of all home purchases in the quarter were cash only, up from the pandemic low of 39% and closer to the historical norm.
Another reason for Manhattan’s strength at the start of 2022 was supply. While the rest of the country is grappling with a shortage of homes for sale, Manhattan still has plenty of inventory, albeit on the decline. According to Corcoran, nearly 5,000 listings were made this quarter, the most since records began in the first quarter. But for the first time in five years, inventory fell below 6,000 units.
“With robust sales and rising prices barring unexpected shocks, this outstanding first quarter should have everyone feeling very optimistic about another meaningful year ahead,” said Pamela Liebman, President and CEO of Corcoran.
The question is how much higher prices can go in Manhattan before shoppers start backing out of stores. The median price of an apartment in Manhattan hit an all-time record of $1,190,000 in the first quarter. The median price for the new development was over 2.3 million US dollars.
The biggest price gains are at the top. Prices for apartments with four bedrooms and more increased 31% year over year to $6.5 million. As buyers drove up prices, only 20% of the homes sold sold for less than $1,200 per square foot, the lowest percentage on record, according to Corcoran.