Manhattan residential real estate sales topped $7 billion in the first quarter, marking the strongest-ever start to a year as the market shows no signs of slowing, according to new sales data.
There were 3,585 sales in the first quarter, the highest number ever for a first quarter, according to a report from Miller Samuel and Douglas Elliman. That’s up 46% from the first quarter of 2021. Total sales volume surged by 60% to over $7.3 billion, as falling inventory also led to continued growth in prices.
The average price of a Manhattan apartment jumped 19% over the previous year’s period, to $2,042,113.
The strength came despite rising interest rates, concerns about a possible recession and falling stocks, which tend to have an outsize impact on the Manhattan real-estate market given the city’s dependence on the financial industry.
It doesn’t look like a push for a return to the workplace is driving the increase, either. Only about 36% of New York workers have returned to the office, according to data from Kastle Systems.
Jonathan Miller, CEO of Miller Samuel, the appraisal and research company, said the assumption that people live in Manhattan because of their jobs is now being challenged.
“You have a lot of people who are working remote, but want to be in Manhattan,” he said. “They’re attracted to the cultural offerings, the restaurants, Broadway. Remote work doesn’t just mean the suburbs. There could be as many people working remotely on the Upper East Side of Manhattan as there are in Westchester.”
Rising interest rates also have less impact on wealthy buyers, who dominate the Manhattan market. As rates go up, they simply pay more cash. More than 47% of all real-estate purchases in the quarter were all-cash, up from the pandemic low of 39%, and closer to the historical norm.
Another reason for Manhattan’s strength at the start of 2022 was supply. While the rest of the country grapples with a shortage of homes for sale, Manhattan still has ample inventory, even though it is declining. Almost 5,000 listings hit the market in the quarter, the most of any first quarter on record, according to Corcoran. Yet for the first time in five years, inventory dipped under 6,000 units.
“With robust sales and improving prices, barring any unexpected shocks, this stellar first quarter should have everyone feeling very optimistic about another momentous year ahead,” said Pamela Liebman, Corcoran’s president & CEO.
The question is how much higher Manhattan prices can go before buyers start backing down from deals. The median price of a Manhattan apartment hit an all-time record of $1,190,000 in the first quarter. The median price for new development topped $2.3 million.
The biggest price gains are at the top. Prices for apartments with four or more bedrooms jumped 31% over last year, to $6.5 million. As buyers droves prices higher, only 20% of apartments sold went for less than $1,200 a square-foot, the lowest percentage on record, according to Corcoran.