New York’s luxury market lost some of its shine last year.
Despite an uptick across the globe, luxury home prices in the city dropped in 2023 and sales fell by even more, according to Douglas Elliman and Knight Frank’s annual Wealth Report.
Prices in New York fell 2 percent, ending the year 8 percent below their peak, according to the report, which measures price performance across 100 destinations worldwide.
Though the city still snagged its fair share of luxury deals, last year’s top trades were significantly smaller than those in 2022. Not a single sale cracked the $100 million threshold, compared to two in the previous year.
The priciest deal — an $80 million resale at Vornado’s 220 Central Park South — was fell more than $100 million short of the sale of David Och’s penthouse at the same building, which was the most expensive sale of 2022.
But the price differential can be chalked up to the timing of when new luxury buildings — and their top-dollar penthouses — are put on the market, according to Douglas Elliman’s president and CEO, Scott Durkin.
“Usually that kind of price is [found on] the top three floors of a new building,” Durkin said. “There are very few, and when they do come on the market, they tend to move rather quickly because they are so special.”
The downward swing in prices may be an opportunity for buyers, the report noted. (Brokerages tend to portray almost any set of circumstances as a rationale to buy.)
Across the planet, luxury prices increased 3 percent on average, beating economists’ expectations for global property markets, according to Kate Everett-Allen, the head of international residential and country research at Knight Frank.
“Stock markets were heading for more pain, inflation was veering out of control and the pandemic-fueled property boom was set to end in tears as borrowing costs hit 15-year highs in some markets,” Everett-Allen said in a statement. “However, that never happened. We’ve seen a much softer landing in terms of price performance around the world.”
While prices generally held up, sales volume did not. Taken together, sales in New York, London, Dubai, Singapore, Hong Kong and Sydney declined 37 percent last year.
In New York City, the drop in luxury sales was likely attributable to a shortage of listings, Durkin said. He added that last year marked the “lowest inventory we’ve ever had” in New York.
“There’s a false sense of feeling like the market has dropped — because we don’t have anything to sell,” Durkin said.
As sales fell in several major markets, they went up in others, rising 7 percent in Miami and 6 percent in Boston. Houston, Los Angeles and California’s Orange County also notched year-over-year increases.
Though New York’s luxury market slipped, the report predicts a rebound in 2024. It estimated sale prices would grow 2 percent and rents 5 percent.
“Incremental reductions in the interest rates have really given people the confidence to come back into the market,” Durkin said.
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