Manhattan Real Estate Market: A Return to Strength

Q4 2024 Market Analysis

Executive Summary

The Manhattan real estate market demonstrated remarkable resilience and recovery in Q4 2024, marking a significant turnaround from early 2024. Three key factors drove this revival: decreased prices, lower mortgage rates, and a robust economy. This confluence of factors unleashed pent-up demand, resulting in a surge in sales activity and a notable reduction in available inventory.

Key Market Indicators

Sales Activity

• Closed sales increased 3% year-over-year

• Contract signings surged 22%, marking the fourth-largest annual gain since 2012

• Total sales volume reached $5.55 billion, up 6% from the previous year

• Days on market decreased to 116 days, showing improved market efficiency

Inventory Dynamics

• Available listings dropped to 5,900 units, an 8% year-over-year decline

• Lowest fourth-quarter inventory level in approximately ten years

• New development launches remained limited with only 110 sponsor units

• New listings fell 4% below their ten-year average

Price Trends and Market Value

The market demonstrated a clear prioritization of value, with several notable trends:

• Average price per square foot: $1,811 (-2% YOY)

• Median price per square foot: $1,275 (-5% YOY)

• Seven consecutive quarters of price per square foot declines

• Signs of price stabilization emerging with smaller percentage decreases

Neighborhood Analysis

Downtown

• Maintained highest median price in Manhattan at $1.55M

• Experienced 12% increase in average price per square foot

• Notable high-end sales, including One High Line West PH36 at $47M

East Side

• 5% increase in sales volume

• 15% reduction in inventory

• Stable median price at $1.22M

West Side

• Modest 1% increase in sales

• Significant 13% reduction in inventory

• Fastest average days on market at 106 days

Market Outlook

The Q4 2024 performance provides a solid foundation for 2025, characterized by:

• Increasing buyer confidence

• Stabilizing prices

• Healthy absorption of inventory

• Sustained demand across various price points

Conclusion

The Manhattan real estate market has demonstrated remarkable resilience, successfully navigating challenges including election uncertainty, global events, and fluctuating mortgage rates. The strong performance in Q4 2024, particularly in contract signings and inventory reduction, suggests a market that has found its footing and is poised for continued stability in 2025.