Manhattan Gets Back To Zero

April 2, 2025
  • Manhattan Sales Are Back To Long Term Norms
  • Manhattan Prices Are Up, With Greater Gains At The High-End
  • Even In A Market Dominated By Cash, The Rate Of Financed Sales Gains 2X Cash

I’ve told this story before, but please indulge me. In early 2023, several reporters asked me how the Manhattan housing market would look. My description? “The Year of Disappointment.” (Hey, I’m not a marketing guy). A year later, my description for 2024 was “The Year of Less Disappointment.” For 2025, I have been saying, “The Year of Getting Back To Zero.” And the early numbers clearly indicate that. Manhattan Q1-2025 sales surged 28.8% year over year from a depressed year-ago period to 1.1% above the decade average for the first quarter. Sales are now back to parity with long-term averages.

Source: Elliman Report: Q1-2025 Manhattan Sales

Why Such Market Strength?

  • Manhattan Rents At Record Highs, Pushing Consumers Into Sales
  • Mortgage Rates Drifting Lower, Incrementally Driving New Demand
  • Buyers Waiting Three Years For Rates To Fall And Have Lost Patience
  • Tariff Tantrums Have Caused Heavy Financial Market Losses

Despite High Rates, Financed Sales Gain 2X Over Cash

Here’s a snapshot from my internal spreadsheet that shows year over year sales gains for both cash and financed purchases. Even though Manhattan was a 58% cash market in Q1-2025, the growth of financed sales was double that of cash. The surge in cash buyers was driven by sharp losses in the financial markets as threats of tariffs dominated news feeds.

High-End Outperformance

The luxury market, defined as the top 10% and began at $4.4M in Q1, was a lot tighter than the overall market as listing inventory collapsed and a new record price was reached. Luxury listing inventory dropped 24.1% year over year, while the overall market experienced a 7.5% gain in supply over the same period. The average sales price in the luxury market reached an all-time high of $10.3M due to limited supply and an 18.1% expansion of average sales size. 

Final Thoughts

The moment finally arrived after three long years for the Manhattan housing market to get back to zero sales-wise. Cash is still a key driver of sales, but financed purchases have grown at a much higher rate. Consumers, if they can afford it, are stepping into the market. 

The Actual Final Thought – Here’s an important must watch SNL primer on how Manhattan became Manhattan.

Did you miss the previous Housing Notes?

March 31, 2025

Tariffs Tantrums Are Getting More Pushback Than Donut Holes

Image: Gemini

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