Newly released market reports by some of New York’s biggest and busiest real estate brokerages indicate that despite historically high interest rates and a lack of inventory, wealthy buyers have shown that luxury properties in New York City are still very much in demand. According to a new third-quarter report by Compass, the number of contracts signed for homes asking $20 million or more spiked 300 percent year-over-year. At the same time, luxury deals were up 23.6 percent on a quarterly basis, per Douglas Elliman.
“Significant deals are happening in penthouses and large apartments, many of them off-market,” said Compass broker Ian Slater in the firm’s report. “This is because at the top of the market, the buyers are insulated from interest rates (most buy all cash or with financing against other assets) and also, there is extremely little supply.”
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Compared to last year, Compass found that properties priced in the $5 to $10 million and $10 to $20 million ranges only decreased 1.9 percent and 2.6 percent, respectively.
To Slater’s point, ultra-luxury inventory levels fell 7 percent from last year, the biggest drop in any price bracket. The shortage has caused home prices to surge. The median price for a Manhattan home currently stands at $1.17 million, a 2 percent rise from 2022, according to Corcoran. When it comes to the top 10 percent of the market, the median luxury home price clocks in at $6 million, a 4.3 percent uptick from last year.
“We don’t anticipate significant changes,” added Coldwell Banker Warburg president Frederick Warburg Peters, referring to the fourth quarter. “Buyers, hemmed in by high interest rates and inventory shortages and anxious about the state of the world and the country, will step up only when they find the right thing at the right price. For some, that can take a year or even more. But as more and more people come back into their offices, the utility of having a home in the city continues to rebound.”
Meanwhile, Manhattan has also been seeing renewed interest from foreign home buyers, Bloomberg reported. Overseas shoppers are making a beeline for buzzy new developments all across the city, while domestic buyers remain somewhat reticent and on the sidelines, waiting. “We’re definitely at an inflection point, and you can feel change in the air,” Corcoran agent Kane Manera told Bloomberg. “Any more geopolitical shifts that favor the U.S. and a slight plateauing of the dollar or other currencies getting stronger, and it could really be a rush.”
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