Elegran Manhattan Market Update: November 2023

Manhattan Market Update: Sellers Maintain Light Grip on the Market

This month, sellers may have a small advantage due to heightened demand, but buyers also have favorable conditions with several indicators leaning their way.

Below, the Elegran | Forbes Global Properties Leverage Indicator provides a clear snapshot of the market, clearly showing whether it’s buyers or sellers who have transactional leverage. 

This index is determined by 4 key metrics and how they've been trending since the last month:

• SUPPLY (favored BUYERS in October)
• DEMAND (favored SELLERS in October)
• MEDIAN LISTING DISCOUNT (favored BUYERS in October)
• MEDIAN PRICE/SF (favored BUYERS in October)

We’ll examine these four metrics individually before taking a look at the indicator.

Manhattan Supply

Supply increases rapidly in September and October, and its peak is reached typically at the end of October before a sharp drop in November. This has been the historical cadence for Manhattan supply. So, although Buyers enjoy more listings to choose from in October, while sellers suffer from more competition, that balance reverses course quickly in November. What does this mean for…

• BUYERS?  Peak October opportunities will decline sharply in November.
• SELLERS?  Peak October competition will decrease sharply in November.

Manhattan Demand

Manhattan's demand, measured by contracts signed, bottomed in September. Since then, it bounced back 40% in October. What does this mean for…

• BUYERS?  More competition.
• SELLERS?  More activity.

Manhattan Median Price/SF

The median price per square foot has been quite stable all year, but hit a 12-month low in October. What does this mean for…

• BUYERS?  Prices are moving in their favor.
• SELLERS?  Prices are moving against their interests.

Manhattan Median Listing Discount

After a steep decline in Q2, the median listing discount began ticking up again in September and October.

• BUYERS?  Discounts are moving in their favor.
• SELLERS?  Discounts are moving against their interests.

Elegran | Forbes Global Properties Leverage Indicator: Manhattan

The Elegran | Forbes Global Properties Leverage Indicator signals who holds the upper hand in real estate transactions—buyers or sellers. 

Looking at the graph below, this is indicated by the direction of the curve, where:

• An increasing trend from left to right indicates a seller’s market
• A decreasing trend from left to right indicates a buyer’s market

The relative strength of that leverage is indicated by the slope of the curve, where:

• A gentle slope indicates a weak advantage by one party over the other
• A sharp slope indicates a strong advantage
  

Although three of the four metrics powering the indicator favored buyers this month, the fourth, demand, shifted 40% toward sellers. This means sellers maintain a light grip on the market.

Rental Remarks

In September,* the median rent in Manhattan has cooled ever so slightly but remains near record highs. On the other hand, the average 30-Year Fixed Rate JUMBO Mortgage Index¹ trends near 8%. So, it’s a “catch-22” for renters, as the rent versus buy scale may feel equally punitive on both sides.

*August 2023 data is not yet available.

¹Courtesy of Federal Reserve Bank of St. Louis

Investor Insights 

All-Cash Opportunities

With Manhattan cap rates between 2.5 - 3.0% and the average JUMBO mortgage APR at 7.529%,² there is simply no net income potential on leveraged investments.  However, with rents near all-time highs, opportunities exist for all-cash buyers.

Global Currency Opportunities 

On the sell side, a strong USD affords foreign investors, depending on their native currency, the opportunity to realize significant capital gains on selling their assets.

²Data courtesy of Wells Fargo, Chase, and Bank of America

If you would like to chat about the most recent market activity, feel free to contact us at info@elegran.com or connect with one of our Advisors.

About Us

Welcome to Elegran, where our mission is to revolutionize the world of real estate. Founded in 2008 by Michael Rossi, our journey began with an unwavering drive for motivation, innovation, and a genuine care for our clients.

As an independently owned brokerage, we pride ourselves on our elite team of "advisors," offering a personalized touch that goes above and beyond the traditional real estate experience. Armed with robust data insights, we empower our clients to make informed decisions that lead to success.

Distinguished as the exclusive member of the invitation-only Forbes Global Properties network in NYC, Elegran proudly stands at the forefront of excellence. This exclusive partnership broadens our horizons, enabling us to connect buyers, sellers, and investors with extraordinary luxury properties not only in New York City but across the globe.

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