2024 Q3 New York City Real Estate Market Report
Overview:
In Q3 2024, the New York City real estate market remained resilient despite economic uncertainties. Both the sales and rental markets experienced growth, driven by stabilizing mortgage rates and increasing buyer activity. High demand, particularly in the rental market, continued to push prices upward, while the luxury sales market saw a resurgence.
Sales Market Highlights:
- Price Trends:
- Manhattan:
- The median sale price for condos in Manhattan reached $1.25 million, a 2.5% year-over-year increase.
- Co-op median prices saw a 1.8% increase to $850,000.
- The average price per square foot for condos in Manhattan was $1,780, a slight rise of 1.5% from Q2.
- Brooklyn:
- The median price for condos increased by 3% year-over-year to $980,000.
- Co-op sales in Brooklyn saw a 2% increase in median price, reaching $725,000.
- Sales Volume:
- Manhattan:
- Total sales volume grew by 6% in Q3 compared to Q2, with about 2,350 transactions.
- The Upper East Side and Downtown Manhattan saw the highest activity, accounting for 30% of all sales.
- Brooklyn:
- Sales volume increased by 4% from Q2, with 1,750 transactions, driven by the DUMBO and Park Slope neighborhoods.
- Inventory Increase:
- 12% growth in listings from Q2 to Q3, bringing more options to the market. Manhattan had approximately 8,000 active listings by the end of Q3, while Brooklyn had 6,500.
- Luxury Market Recovery:
- The luxury segment (homes priced above $5 million) rebounded significantly in Manhattan, with $1.8 billion in total sales. Tribeca and the Upper West Side saw multiple transactions over $20 million.
- Penthouse sales in areas like Hudson Yards and SoHo surged by 18%, signaling renewed interest from high-net-worth buyers.
- Buyer Demographics:
- International buyers accounted for about 20% of all luxury sales, particularly from Europe and China, driven by favorable exchange rates.
- First-time homebuyers saw a slight return, accounting for 12% of transactions, spurred by flexible mortgage products and buyer incentives.
Rental Market Highlights:
- Record-High Rents:
- The rental market continued its upward trend in Q3, with Manhattan median rents hitting $5,200/month, a 5.5% year-over-year increase.
- Brooklyn median rents surged to $4,000/month, an increase of 6.2% year-over-year.
- Luxury rentals in Manhattan (defined as rents above $10,000/month) saw demand rise by 7%.
- Unit Type Demand:
- Larger apartments (2-3 bedrooms) were in high demand due to remote work and families needing extra space.
- The average rent for a 2-bedroom unit in Manhattan was $6,500/month, while 3-bedroom apartments averaged $8,750/month.
- Landlord Incentives Decline:
- Concessions, such as free months of rent, decreased by 25% compared to Q1 and Q2, with only 15% of new leases offering incentives, reflecting strong demand and limited supply.
- Vacancy Rate:
- The vacancy rate in Manhattan dropped to 1.3%, the lowest level in over two years, while Brooklyn’s vacancy rate stood at 1.6%.
New Developments and Construction:
- New Projects:
- In Q3 2024, new development projects across Manhattan and Brooklyn delivered over 1,500 new units to the market, with significant projects in Hudson Yards, Downtown Brooklyn, and Long Island City.
- Notable new condos, like The Cortland in Chelsea and 11 Hoyt in Brooklyn, attracted high demand, particularly from international buyers.
- Construction Pipeline:
- Over 3,500 new units are expected to come online by mid-2025, primarily in Long Island City and Downtown Manhattan, which may help alleviate supply constraints in the rental market.
Future Forecast:
- Sales Market Outlook (Q4 2024):
- Moderate price increases are expected to continue, particularly in prime neighborhoods like Tribeca, SoHo, and Downtown Brooklyn, driven by strong buyer demand.
- Manhattan condo prices are forecasted to grow by 2% to 4% by the end of Q4 2024, with luxury sales expected to lead the charge.
- The inventory is expected to increase further by 10%, providing more buying opportunities, but competition for premium units will remain strong.
- Mortgage rates are likely to remain steady, helping to sustain buyer activity in both the luxury and first-time buyer segments.
- Rental Market Outlook (Q4 2024):
- Rents will likely continue to rise, albeit at a slower pace, with projections of 2% to 3% rent growth in both Manhattan and Brooklyn by year-end.
- The demand for larger units will persist as more households seek flexibility for work-from-home arrangements.
- Vacancy rates will remain low, but may slightly improve as new rental buildings become available in 2025, offering some relief to renters.
- Market Drivers:
- International buyers will continue to be a key factor in the luxury market, particularly in Manhattan.
- New development in Brooklyn and Long Island City will attract buyers looking for modern amenities and competitive pricing compared to Manhattan.
Key Numbers Recap:
- Median sale price (Manhattan condos): $1.25 million (+2.5% YoY)
- Manhattan median rent: $5,200/month (+5.5% YoY)
- Brooklyn median rent: $4,000/month (+6.2% YoY)
- Vacancy rate (Manhattan): 1.3%
- Sales volume (Manhattan): 2,350 transactions (+6% Q2)
- Luxury market sales: $1.8 billion (Manhattan)
Overall, Q3 2024 showed a robust real estate market in New York City with continued growth in both the sales and rental sectors. While price increases and low inventory remain challenges, the market outlook remains positive, with steady demand, especially in the luxury and larger-unit segments.
