Significant Growth in Apartment Sales

In the first quarter of the year, Manhattan’s apartment sales experienced a remarkable 29% increase compared to the same period last year. This surge, reported by real estate appraiser Miller Samuel and brokerage Douglas Elliman, brought the number of closed sales to 2,560, up from 1,988 during the previous year.

Moreover, the total sales value escalated to $5.7 billion, marking a 56% rise year-over-year. The luxury segment, especially properties priced over $5 million, drove much of this growth, revealing a 49% increase in sales compared to the previous year.

Luxury Market Resilience

Properties in the ultra-high-end sector, specifically those priced at $20 million or more, recorded their best first quarter since 2019, according to findings from Compass. The company noted that this trend suggests a renewed confidence among luxury buyers, which has been largely unaffected by mortgage rate fluctuations.

Notably, 58% of transactions during this quarter were made in cash, and an even higher 90% of sales for apartments costing over $3 million were cash transactions, highlighting buyers’ ability to sidestep the challenges posed by rising interest rates.

Shifts in Market Dynamics

While the upper echelon of the Manhattan real estate market thrived, properties within the mid-market range—those priced between $1 million and $3 million—saw a 10% decline in signed contracts. In contrast, entry-level properties priced between $500,000 and $1 million performed more robustly.

Brokers have attributed the uptick in high-end sales to a mix of macroeconomic factors. The traditional link between Manhattan’s real estate market and the stock market has weakened as buyers seek stability in real estate amid a volatile financial landscape.

The Return of Affluent Buyers

The return of affluent buyers to Manhattan is also noteworthy, spurred by back-to-office mandates from major companies. There is an increasing trend of individuals returning to the city from states like Florida, as well as those known as “boomerang wealthy” who left during the pandemic.

“There’s a noticeable movement of people returning from Florida and relocating from Los Angeles,” noted Charlie Attias, a real estate agent at Compass.

The ongoing transfer of wealth from baby boomers to their heirs—termed the “great wealth transfer”—is further influencing the market dynamics, with an uptick in purchases coming from younger buyers equipped with funds from family trusts.

Looking Ahead

Although the first quarter transactions reflect the market conditions from earlier months, signs indicate that momentum continues. March contract signings were strong, particularly for high-end properties, with signed contracts for apartments exceeding $10 million tripling.

Jonathan Miller, CEO of Miller Samuel, cautioned that despite the impressive 29% increase in sales, the total was just 1.1% above the historical average for the past decade. However, this does not undermine the overall health of the Manhattan market.

Pamela Liebman, president and CEO of Corcoran, affirmatively stated, “It’s clear that Manhattan’s market is not just holding steady — it’s thriving.”