The Q3 2024 Manhattan Apartment Market Report is out, and as expected, the market is showing signs of recovery. Declining mortgage rates since May have led to a 6% increase in closings this quarter compared to the same period last year. With a sharp rise in signed contracts, we anticipate a strong fourth quarter, driven by continued rate declines, easing inflation, and further expected rate cuts.
Jonathan Miller, President and CEO of Miller Samuel Inc., notes, “It looks like we’re gearing up for sales to reach parity with long-term trends, but we’re not there yet. Over the next six months, there’s significant downward pressure on mortgage rates, which will boost sales activity.” However, he also warns that inventory levels may drop as sales outpace new listings coming onto the market.
The increased pace of closings has reduced apartment inventory to 6.2 months, the lowest level since January. With inventory tightening, demand could soon begin to outpace supply, particularly as buyers are feeling a heightened sense of urgency. This urgency is evident from the average days on the market dropping to 105 this past quarter—the lowest in two years. However, as the Fed continues to cut rates, more supply may enter the market to meet rising demand, which could ultimately drive prices higher.
Given the current trends, prospective buyers shouldn't delay, as the market may soon shift in favor of sellers as noted before. Bess Friedman, CEO of Brown Harris Stevens, confirms this outlook: "Now that inflation is headed in the right direction and rates are falling, combined with the stock market’s record-breaking performance and a slowing but still healthy labor market, demand should remain strong into 2025."
Whether you’re looking to buy or sell, the current market trends present promising opportunities for both sides. Buyers can still take advantage of favorable mortgage rates, while sellers stand to benefit from rising demand and tightening inventory. As we move toward a strong fourth quarter and into 2025, it’s a great time for both buyers and sellers to make their move.