New York Property Market Outlook

Posted by Wei Min Tan on June 7, 2024

Manhattan, New York remains a top choice for global investors seeking a safe and stable property market.  This appeal stems from factors like limited supply, high global demand and consistent value appreciation.  Even with lower rental yields compared to other locations, the New York property market offers diversification and a hedge against inflation, political uncertainty, and global economic disruptions.  This outlook explores the current trends impacting the prized Manhattan, New York real estate market.

Read about Wei Min’s style in Best Manhattan property agents and Role of a buyer’s broker.

New York’s Overall Condo Market

The latest Q1 2024 data from Miller Samuel shows that the average price per square foot for a Manhattan condo is now $1,939.  This represents an 8.5 percent decline compared to the previous year.  The number of sales dropped to 777, marking a 20.6 percent decrease year-over-year.  Additionally, the median sales price fell to $1.632 million, a slight decrease of 0.8 percent from a year ago.

Wei Min’s article: Manhattan Condo Historical Price Trend

New York’s New Developments

New developments, brand-new properties purchased directly from the developer, had an average sales price of $3.25 million, a 7.6 percent increase from the previous year.  The number of sales was 193, a 4 percent decrease from a year ago.

Deal example:  40 Mercer in Soho.  Ultra luxury apartment building commanding premium rents, in Soho.  In this deal, we also took over with tenant in place, which meant no vacancy period having to look for a tenant.

Low Property Supply

Supply has been increasing, but the market is still facing a supply shortage.  The challenge for the market is that while supply has been increasing, it’s still not enough as it’s still below the 2019 and 2021 levels.

Demand

Because of high mortgage rates, the anticipated pickup in demand has not happened.  The 30-day liquidity rate is moving sideways and this represents ongoing buying opportunities.

Wei Min’s article: Transaction Costs Manhattan Condominium

Property Contracts Signed

Sale contracts have fallen below 2023 levels.  This signifies that the market is still soft.

Deal example:  Represented multiple buyers at 130 William, FiDi’s new development with very low carrying costs and full amenities.  Proximity to the Fulton Street subway station and high quality finishes make this a good buy.

Rental Market

Rental price per sqft are at record highs, with demand outpacing supply. In April 2024, rent per sqft was at $84.80, up 6.5 percent from a year ago.  The number of new leases increased by 41.7 percent from the previous year, reaching 5,482. Manhattan’s residential vacancy rate is the lowest in the U.S., at 2.49 percent.

Market Pulse

Rising interest rates have shifted the market back to buyer’s advantage.  With mortgage rates reaching 7-8 percent, financing is becoming a hurdle for many potential buyers.  Additionally, high interest rates make rental properties with financing less attractive as investments due to insufficient rental yields to cover mortgage costs.

What We Do

We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale