Cash deals dominate slow Q1 for Manhattan’s resi market 

Manhattan’s residential market hasn’t escaped the consequences of high mortgage rates just yet. 

Though rates are declining and the number of financed deals continued to fall, according to Douglas Elliman’s quarterly report on condos and co-ops. As deals dipped overall, one winner emerged in the market. 

“The market is still highly dependent on cash sales,” report author Jonathan Miller said. 

Cash sales accounted for 63 percent of deals closed in the first quarter of 2024, marking the third highest share since Miller started tracking the metric a decade ago. On an annual basis, cash deals rose 1.5 percent, while mortgage-related transactions dropped nearly 27 percent. 

Sales across the two property types dipped below 2,000 for the first time in three years with an 11 percent decline from the year-ago total and a 17 percent drop compared to the fourth quarter of 2024.

The lingering effects of elevated rates and last year’s economic uncertainty are still keeping sellers on the sidelines, pushing listing inventory down nearly 2 percent year-over-year. But the number of co-ops and condos on the market picked up last quarter with a 7 percent increase from the previous three-month period. 

Last quarter, the median sale price for condos and co-ops was $1,049,000, down 9 percent from the fourth quarter of 2023 and 4 percent from the same period last year. 

Though prices overall decreased annually, the dip is largely tied to the condo market, Miller said. While the median price for condos dropped 1 percent year-over-year to $1.6 million, the metric for co-ops rose 2 percent in the same period to $815,000. 

Price cuts dominated the residential market last quarter, accounting for four out of 10 resales. Slashing prices is an indication that buyers are still wary of making deals, said Richard Ferrari, head of Douglas Elliman in New York City and the Northeast. 

“Buyers don’t want to overpay,” Ferrari said. “There’s still some hesitation in this market.”

Despite the uncertainty, Ferrari said buyers are still jumping on properties that are in good condition and priced appropriately.

“A buyer today in 2024 knows they have to do some work on renovations that were done 10, 15 or 20 years ago as long as they don’t have to do everything,” Ferrari said, adding that inflation has pushed the cost of renovation to new highs in recent years. 

Inventory shortages downtown constrained sales last quarter in popular neighborhoods like the West Village, according to Ferrari. Buyers turned instead to the Upper East Side, where more moderately priced homes are on the market, particularly east of Third Avenue. 

The median sale price for the luxury market — defined as the top 10 percent of all co-op and condo sales — was $5.8 million last quarter. It was up from $5.7 million in the same period last year, marking the fourth consecutive annual increase.

The luxury market also captured a larger share of bidding wars last quarter, with nearly 9 percent of homes trading above the asking price compared to 5 percent in the overall market. 

“We’re experiencing a very healthy market,” Ferrari said. “It’s a presidential election year, and that could put the brakes on it. But we haven’t seen that yet.”

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