New York’s Real Estate Market May Be Starting to Turn

Manhattan is now home to over 8,000 for-sale apartments, or around 1,000 more than the 10-year average. That’s a 9.8-month supply.

Photo of NYC skyline
Photo by Joshua Armstrong via Unsplash

Sign up for smart news, insights, and analysis on the biggest financial stories of the day.

No one can remember the last time there was a buyer’s market in New York. We may be looking at one now. 

With a glut of for-sale apartments and prices that are finally starting to creep down, a handful of appraisal firms are officially labeling New York City a “buyer’s market.” (Sorry, renters; we looked for good news, but couldn’t find any.) 

Augmented Realty

Manhattan is now home to over 8,000 for-sale apartments, or around 1,000 more than the 10-year average, Jonathan Miller, CEO of research and appraisal firm Miller Samuel, told CNBC on Tuesday. That’s enough for a 9.8-month supply of for-sale apartments — far higher than the six months’ supply that typically delineates a seller’s and buyer’s market, according to a recent report from Brown Harris Stevens.

In the second quarter of the year, it was enough to spur a busy market, with a 12% increase in closed deals compared to a year ago, according to a Douglas Elliman and Miller Samuel report. The average sale price fell 3%. One major reason: The reality of higher-for-longer rates is setting in, and sellers are realizing they need to meet buyers in the middle. “Many [sellers], though definitely not enough, are at this point where they realize that they need to sell — a [rate cut] is not going to happen,” Adie Kriegstein, a New York City-based real estate agent at Compass, told The Daily Upside.

It’s the first sales rebound in two years. But renters have yet to feel any relief:

  • The rental vacancy rate is another story entirely, sitting at just 1.4%, per a Bloomberg report published Tuesday. Rents, meanwhile, are up 33% from pre-pandemic levels.
  • Between 2010 and 2023, the city saw a 25% increase in the number of jobs, but just a 7% increase in housing supply, per local and federal government data; and while Mayor Eric Adams has set a lofty goal of 500,000 new homes built over the next 10 years, 2023 saw just 16,300 new units proposed.

Commerce Department: One oft-floated solution? Repurposing old commercial real estate, particularly office space left unused in the remote work era, as residential living. The city already offers an accelerator program seeking to convert office buildings into residential space; nearly 70 buildings were in the program as of June, Bloomberg reports. Makes sense to us, seeing as the typical Manhattan studio apartment is about the size of an office cubicle anyway.