Dealmaking rose annually for the top 10% of the market
By Haden Kiilerson | Jan 07, 2025 at 09:09 a.m. ET Updated
After spending much of the year on the sidelines, Manhattan’s affluent home buyers resumed dealmaking at the end of the year, bolstered by stock market gains, the presidential election results and being fed up waiting for lower mortgage rates, according to a raft of market reports on Friday.
Luxury apartment sales—defined as the upper 10% of all co-op and condo transactions—in the New York City borough were up 3.7% annually during the fourth quarter, according to a report from Douglas Elliman on Friday.
The total of 250 luxury deals was down 10.7% from the third quarter—when there was a momentary decline in mortgage rates.
The uptick in luxury sales in the third and fourth quarters indicates “buyers have accepted the new normal” in regards to higher interest rates, said Leonard Steinberg of Compass, which released its own report on Friday.
The fourth quarter was rather inconsistent for luxury home sales in Manhattan, as tracked by the weekly Olshan Report, noted Frederick Warburg Peters, president emeritus of Coldwell Banker Warburg, in a separate report also released on Friday. Weekly sales for homes priced at $4 million and above ranged from 19 to 39, with two of the year’s best weeks occurring in the fourth quarter. There were 34 luxury deals inked in the second week of December, and 39 contracts were signed during the first full week of November, when the election was held.
“As was evident with the rise in the stock market, the Republican victory soothed financial nerves, at least for now, by clearly signaling the return of a period of reduced regulation and taxation for the affluent,” Peters said.
Luxury prices were up as well in the fourth quarter, rising 6.5% annually and 13.3% quarterly to a median sales price of $6.525 million, according to Douglas Elliman.
“Inventory is tighter and equities markets are up—way up—in some instances 30% higher than they were in 2019,” Compass broker Brian K. Lewis noted in its report. “Buyers are wealthier and have been sitting on their money ready to engage. They are now engaging.”
Indeed, luxury listing inventory took a significant dip during the fourth quarter following three consecutive quarters of increases, noted Jonathan Miller, president and CEO of the appraisal company Miller Samuel and author of the Douglas Elliman report. The number of homes for sale in Manhattan fell 8.1% annually and 18.1% quarterly, according to the brokerage.
“The below-average quarter for new listings combined with strong contract activity and very few new development introductions [drove] listed inventory to its lowest fourth-quarter figure in nine years,” according to a report from Corcoran on Friday.
Looking at the new year ahead, Brown Harris Stevens CEO Bess Freedman noted several reasons to remain optimistic, namely the past year’s strong stock market and economic growth, which should boost the luxury market even if the economy doesn’t remain as good.
