Manhattan home prices rose for the first time in more than a year, driven mainly by demand for expensive properties and lower mortgage rates, factors that set the stage for a broader housing market recovery in 2024.
The average sale price was $1.16 million in the fourth quarter, up 5.1 percent from a year earlier, Miller Samuel Inc. estimates. and the brokerage firm Douglas Elliman Real Estate.
This is the first annual increase since the third quarter of 2022, according to the companies’ data. Sales of $5 million or more soared in the fourth quarter, even as the overall number of transactions fell. In fact, at a time when mortgage rates were climbing toward 8 percent, more than two-thirds of Manhattan buyers paid cash. This is the highest rate since Miller Samuel began tracking this metric in 2014. However, the market may already be turning in the direction of mortgages. Funding costs have fallen sharply over the past two months as traders hope that slowing inflation will allow the Federal Reserve to cut interest rates this year.
Manhattan home contracts – a more accurate gauge of demand than sales – rose in December on a year-over-year basis. This increase marks the beginning of a trend in which lower interest rates will bring in more buyers and encourage more sellers to list their homes. Prices will likely rise under this scenario, said Jonathan Miller, president of Miller Samuel.
“The market is showing the first signs that it is starting to recover,” Miller noted. “It’s not going to turn overnight, but it’s trending towards stronger performance in terms of trading and stocks and, to some extent, prices,” he added.
