Manhattan’s luxury market had a Jekyll-and-Hyde year, and unfortunately for sellers and agents, it is still in the Mr. Hyde stage.
During the first half of 2022, sellers rode momentum from last year, when low interest rates and pandemic effects sparked a home-buying boom: Buyers signed 836 contracts for Manhattan homes asking $4 million or more.
In the second half, a very different story unfolded. Rising borrowing rates and a declining stock market limited luxury buyers in the borough to 468 contracts — a decline of 44 percent.
“That is a really significant amount,” said Donna Olshan, who tracks luxury contract signings. “We now find ourselves navigating a choppy luxury market.”
Overall, the 1,304 total contracts signed this year amount to a solid performance, ranking fifth in the past 10 years, according to Olshan.
That was greater than every year from 2016 to 2020, but behind a bumper 2021 and what Olshan called the “golden years” of new development, 2013 to 2015.
“We’ll take it,” Olshan said of this year. But she added that the second half of this year points toward a “pretty rough first quarter” of 2023.
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Luxury buyers chose Downtown more than the other three Manhattan areas Olshan tracked (East Side, West Side and Midtown) this year, closing on 569 luxury apartments and 67 townhouses there. The next most popular area — the East Side — notched 274 luxury apartment and 33 townhouse sales.
Then again, Downtown had led in sales at least seven straight years, Olshan’s report shows.
Total contract volume, based on asking prices, passed the $10 billion mark. Except for last year’s extraordinary market, that threshold had not been reached since 2015, the peak of the luxury condo boom.
Price-slashing was minimal in 2022, as discounts from the original asking price to the final asking price fell to 5 percent, their lowest level since 2015.
Seasonality exists even at the top of the luxury market: Among the 10 homes that sold for $50 million to $100 million this year, nine changed hands in the first half. In the past decade, only in 2020 and 2021 did the second half of the year outperform the first.
The median sale price of luxury homes fell to its lowest level since 2013, according to Olshan, and the price of townhouses per square foot has changed little since then.