1Q22 Manhattan Market Report | Cruise Control

There was continued strong performance in the first three months of 2022 following a record-breaking 2021, with supply/ pending sales still below/above historical averages. This is despite arguably strong headwinds: significant price inflation (in part likely a transitory pandemic hangover), higher-than-comfortable NYC crime rates, and a heartbreaking war in Ukraine. Pricing has recovered to pre-COVID levels, but still hasn’t returned to the last peak.

• Inventory is down 17.2% Y-O-Y but up 10.5% Q-O-Q

• 46.9% of purchases below $500,000, and 56.3% of purchases over $5M are all-cash 

• Listings that were priced correctly and required no price adjustments moved into contract in 79 days vs. 162 days for those with adjustments: overpricing, even in an active market still takes equity out of sellers’ pockets

• Russian foreign buyers account for less than 1% of US real estate purchases, and New York ranks third (after Florida and Georgia)

While rising interest rates are trumpeted by some as a price-dragging phenomenon, it’s important to keep in mind that rates were 50% higher in the heady years leading up to the financial crisis and are still relatively historically low. We believe slowing economic activity caused by rising rates, and not the rates themselves, could be what ultimately puts a chill in the market (if anything does).