10-02 - Luxury Pulse- Manhattan $4M & Over Contracts Soar 52% in September

Manhattan's luxury $4M & over market is defying all expectations Contract activity up 52% this September! Welcome to this week's Pulse Report. Here are last week’s key highlights.

Market Overview: Key Trends Driving the $4M+ Market

• Contract signings for September surged 52% higher than the same period in 2023, outperforming the 10-year average.
• 25 contracts were signed last week, maintaining the same high performance from the prior week.
• New listings fell 7% from the previous week and are down 7% for the month, contributing to a tightening supply.

Neighborhood Highlights:

• The Upper East Side led the market with a 36% share, surpassing Downtown and the Upper West Side, each at 28%.
• This shift is fueled by families seeking proximity to top schools and luxury amenities in newly developed properties on the Upper East Side.

Property Type Breakdown:

• Condos dominated last week with a 72% share, demonstrating strong buyer preference for flexibility and modern amenities.
• Townhouses captured 16% of the market, as buyers continue to favor larger private spaces.
• Co-ops lagged behind, appealing to fewer buyers due to more stringent rules and fewer amenities.

New Developments Soar:

• New developments took a 56% share of contracts, showcasing buyer interest in modern layouts and high-end amenities.
• Caveat: Batching (developers recording multiple contracts at once) can skew these figures, so analyze these numbers with caution.

$10M+ Segment:

• The ultra-luxury market (representing 2-3% of the broader market) saw a 28% share of activity last week.
• Properties in this range continue to attract discerning buyers looking for exclusivity and top-tier amenities.

Median Discounts

• Seven contracts last week were signed at a median discount of 7% from the original asking price.
• Discounted properties that have lingered on the market are providing compelling opportunities for strategic buyers.

Market Pulse Update

The Market Pulse Index climbed to 1.35 points, up 0.6 points from last month and a notable 2.2 points increase compared to the same time last year. This uptick signals a strengthening seller’s market. However, sellers only have leverage when properties are precisely priced. Overpricing can lead to stagnation, even in a competitive market.

Macro Market News: Will Mortgage Rates Fall in October?

Mortgage rates have dropped to their lowest levels in two years, raising the question: will they fall further in October? Here are three key indicators to watch:

1. Unemployment Data: A rise in unemployment could push the Fed to cut rates.
2. Cooling Inflation: If the upcoming October 10th inflation report shows a slowdown, expect mortgage rates to ease further.
3. Market Sentiment: If the broader economic outlook improves, it could stabilize rates, giving buyers more confidence to act now.

Market Perspective: What It Means for You

Sellers: Leverage Your Position in This Strong Market

With contract signings surging 52% higher this September compared to last year and inventory levels dropping, sellers are in a prime position this fall. But leverage is only strong when your property is precisely priced. Here’s how to optimize your strategy:

• Competitive Pricing: With fewer listings, well-priced properties are moving quickly.
• Highlight Unique Value: Showcase your property’s prime location, quality amenities, and distinguishing features.
• Timing is Everything: Consider listing now, as limited inventory could drive competition and maximize your results.

Pro Tip: Minor updates or professional staging can elevate your property’s appeal, especially against new developments offering modern finishes and high-end amenities.

Buyers: Act Now Before Competition Heats Up

With mortgage rates dropping to their lowest levels in two years, and limited inventory, you may be tempted to wait for further rate cuts. Keep in mind:

• More Competition in 2025: Waiting could result in bidding wars as more buyers enter the market.
• Target Properties with Potential: Unrenovated properties in prime locations are the best value buys. Focus on core attributes—space, layout, and location—rather than paying a premium for newly renovated units.

Case Study:

Why Even Trophy Properties Like 740 Park Avenue Are Struggling: A Case Study on Pricing and Buyer Trends in Manhattan’s Luxury Market

Think a prestigious Park Avenue address guarantees top dollar? Think again. While historic co-op buildings like 740 Park Avenue have long been considered the pinnacle of New York luxury real estate, today’s buyers are looking for more than just an elite address. This case study explores how a prime penthouse at this iconic building, originally listed for $39.5 million, experienced a series of price reductions before ultimately selling for just $28 million in 2023—a staggering 18.84% drop from its initial asking price.

The Challenge: Why This “Trophy Property” Lost Its Luster

Despite 740 Park Avenue’s reputation, this penthouse languished on the market for nearly five years. Here’s what went wrong:

• Initial Overpricing: The penthouse was initially priced at a lofty $39.5 million—far above comparable sales in the area. Without the amenities and modern conveniences of newer buildings, the property quickly became perceived as overvalued.
• Limited Amenities: Although 740 Park has a private gym, it cannot compete with the wellness centers, private dining rooms, and high-tech amenities offered by ultra-luxury towers like 220 Central Park South or 432 Park Avenue. Today’s buyers at the $25M+ level expect a complete lifestyle package, not just a prestigious address.

Curious to see what else kept this iconic property on the market for so long? Click to discover the surprising factors that influenced the sale and the critical lessons for sellers of Manhattan’s elite properties. Read more.

Top 2 Luxury Contracts of the Week- SEE ALL 25 CONTRACTS

1. 20 East 76th Street, #12A — Price: $28M, 5,416 sq ft, PPSF: $5,169.
2. 927 Fifth Avenue, #9 — Price: $25.95M, 4,450 sq ft, recently reduced by $1.45M.

Conclusion: What to Watch for Next

The Manhattan luxury market is showing resilience, with robust contract activity and declining inventory setting the stage for a strong close to 2024. Whether you’re buying or selling, strategic timing and positioning are crucial to achieving your real estate goals.

Enjoy the Pulse? Please subscribe on Linkedin to receive the Pulse weekly in your mailbox.Share the Pulse with your connections. Watch my advice videos https://www.youtube.com/@CarolStaab

Until next week, may all your real estate dreams and goals become a reality.

Warmest regards,

Carol

Carol Staab

Global Real Estate Advisor

Sotheby's International Realty..

Email: [email protected]

Website:?CarolStaab.Com

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$4M & Over Market Pulse

1.35

Market Pulse { ratio of suppy vs demand} has?risen 0.6 pts?from the past month?and has?risen 2.2 pts?from this time last year.

Market is in neutral neither favoring buyers or sellers.

10 Year Chart Describing 5 Market Periods & Their Impact on Manhattan Sales. We are starting to see signs of a recovery from the Rate Hike Volume Trap period as mortgage rates have declined. In the overall market, September contracts surged 75% from last September .

Chart courtesy of Urban Digs

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