Q2 2023 showed a much welcome recovery compared to Q1 with a 32.2% increase in total transactions. Contract volume in comparison showed a 22.6% increase from Q1 which is a more accurate reflection of the current market as some closings take extended periods of time. While we saw improvements quarter over quarter, closings as well as contracts are down year over year, by 32.6% and 21.7% respectively.
We know well that the decrease in deal volume is largely due to high interest rates. CNBC recently reported that close to 65% of all transactions in Manhattan in Q2 were all cash deals. We saw that happen time and again in the luxury segment including a $53M sale of a Chelsea penthouse.
Buyers seeking affordability turned their attention to the Upper East Side which is where 21.7% of all deals in Q2 closed.
Negotiability for homes remained the same quarter over quarter at 7% while days on market went up from 160 to 187 in Q2.
Downtown market prices gained in value quarter over quarter. Median price of a condo went up by 10% to $2.5M and median coop was up by 7.6% to $970K. Average prices of condos and coops also went up by 3.3% and 7.6% respectively.
69% of sales in Downtown consisted of 1 and 2 bedroom homes. Studios, 3 and 4+ bedrooms made up the rest 31%.
Inflation has come down year over year however, interest rates haven’t reflected that reality. While we don’t expect the sub 3% rates any time soon, once they do soften, we expect transaction volume as well as prices to go up.
At the moment, besides rates, inventory is the biggest complaint among ready and willing buyers. Good quality inventory is hard to come by. Owners who locked in a low rates and don’t have to sell are not. Reduction in rates will also open up quality inventory we’re all starved for.
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