March 2024 was notable for a significant decline in Manhattan’s luxury residential market, with contract signings for units priced at $4 million and above hitting a three-year low.
According to Olshan Realty, only 123 deals were inked during the month, a sharp drop from the 160 contracts signed in March 2021, and even fewer than the 140 and 130 deals recorded in 2022 and 2023, respectively.
Despite this general slowdown, there were pockets of activity, such as the 25 luxury townhouse contracts secured in a single week, marking the highest since June of the previous year.
This momentum culminated in 30 homes finalizing deals by the end of the month.
High-End Homes Hit the Market
The contraction in the luxury market was evident with the listing of a townhouse at 45 West 70th Street, which went under contract with an asking price of $14.9 million, down from its 2020 listing of $19.6 million.
This five-story property, featuring an elevator, five bedrooms, four bathrooms, two powder rooms, a 33-foot lap pool, gym, garden, and roof terrace, illustrates the market’s adjustment.
Similarly, a co-op on the 8th floor at 1125 Fifth Avenue witnessed a decrease in its asking price from $13.5 million to $10 million within a year.
These instances highlight the market’s transition, where the average home spends 795 days on the market and receives a 16 percent discount from the asking price.
Comparative Observations within the Luxury Industry
Further examination reveals a broader pattern of cooling within Manhattan’s luxury market. A report from Olshan Realty observed a slight uptick in luxury contracts in early March 2024.
However, in total, there was a 24 percent decrease in sponsor deals compared to the previous year, primarily due to a decrease in new construction inventory.
Notably, the priciest unit during this timeframe was a duplex condo at 1 West End Avenue, listed at just under $18 million.
Additionally, another report highlighted a surge in contracts during the week of March 18, with 40 luxury contracts signed, marking the highest number since May 2023, although still indicating a year-over-year decline.
These fluctuations underscore a market grappling with various pressures, including inventory levels and buyer demand.
Market Trends and Prospects Ahead
The recent downturn in Manhattan’s luxury residential market is indicative of wider economic and real estate patterns.
The decline in contract signings, coupled with notable price adjustments and prolonged market durations, signifies a tilt toward buyer leverage.
This period of cooling can be linked to various factors, encompassing economic instabilities, shifts in buyer tastes, and the repercussions of diminished new construction stocks.
Nonetheless, intermittent surges in contract signings suggest that although the market may decelerate, there persists a cohort of buyers poised to seize advantageous moments.
