The Manhattan Q3 report was just released today, and one of the main takeaways in the headlines is the 18 percent drop in sales compared to this same period last year. It’s important to note, however, that closings were nearly 45 percent higher than pre-pandemic volumes in 2019 and 24 percent higher than closing reported in 2018 for that same period.
As I’ve mentioned all along, we saw unusually high volumes of activity as we made our way out of the brunt of the pandemic in 2021 due to pent up demand among other factors; so what we’re seeing now is the market leveling off.
Mortgage rates, which have more than doubled since the start of the year, are what some are claiming to be part of the reason for the decline in sales activity, along with the stock market and recession talks. However it’s worth pointing out that "all-cash” transactions made up almost nearly half of Manhattan sales in Q3.
We’ve also been seeing contracts signed falling over the past few months, which is an indicator of what’s in the pipeline and where the market is headed. As I mentioned in my last email, contracts signed dropped 16 percent from the previous week and this has been the trend since mid-May.
To this end, as you review the Q3 data, keep in mind there is typically a lag from when a contract is signed and when the sale closes, as Brown Harris Stevens CEO, Bess Freedman points out in our Third Quarter 2022 Manhattan Residential Real Estate Market Report. Therefore, we may not see the full impact of the market reset until Q4.
Please visit our company website if you’re interested in viewing the weekly contracts signed, the monthly inventory or any other market reports, which help paint a better picture. And of course, please don’t hesitate to reach out if you have any questions about the market reports or if I can assist in addressing your real estate needs.