While the broader market slowed, certain segments like new developments and ultra-luxury $40 million+ properties demonstrated resilience, supported by high-value transactions. Bespoke was active in these upper segments, facilitating key sales, including 200 Central Park S #20DEF with a last ask of $13.5 million and 212 W 18th Street #19DEF with a last ask of nearly $16 million illustrating that well-positioned properties continue to command attention. “Buyers are becoming increasingly selective, gravitating toward properties that offer immediate value or rare location advantages. When a property checks those boxes, it gets traction even in a cautious market,” explains Mike Cantwell, Partner at Bespoke.
The new development sector notably grew from $319 million in Q3 2023 to $375.9 million, reflecting an 18% increase in volume even amid a 56% reduction in the number of listings, which led to an average sale price climb to $47 million, a 165% rise from last year’s $17.7 million. This trend highlights strong interest in premium, high-value developments as the available pipeline of new construction properties shows signs of slowing. “The reduced supply of new development listings has led to a recalibration where buyers are zeroing in on premium projects. We’re seeing a prioritization of quality over quantity, as fewer developments enter the market but those that do appeal directly to high-net-worth buyers looking for rare, high-quality offerings,” Cantwell notes.
In contrast, re-sale properties saw declines, with volume down from $779.7 million to $655.7 million, a 16% drop, and a 14% decrease in average sale price.
Trade quantity remained steady with a 3% reduction, while a backlog of 40 properties in contract could potentially drive a moderate uptick in Q4 if a substantial number closes by year-end. The condo and co-op sector saw total volume decline from $852.8 million to $821.2 million, a 4% drop, even as the average sale price increased by 20% to $22.7 million, indicating continued demand for higher-end units. Townhouses, with an average price increase of 1%, saw volume fall from $244.2 million to $210.4 million, a 14% decline. This consistency in townhouse pricing suggests stable demand in a segment that offers luxury with less volatility.
Among price segments, the $10 million to $20 million range remained relatively stable, with volume increasing by 2%, from $534 million to $545 million, even as trade quantity dropped by 7%. Average sale prices rose by 10% to $14.3 million, reflecting ongoing buyer interest in the higher end of this bracket. However, the $20 million to $30 million range saw significant contraction, with both trade quantity and volume each down by 56%, the latter falling from $218 million to $95.8 million. Activity in the $30 million to $40 million range was minimal, with only one trade this quarter, marking a sharp 77% drop in volume, from $168 million to $38.8 million. In contrast, the $40 million+ segment surged, with volume doubling from $173.5 million to $351.9 million, alongside a 53% increase in average sale price. “The ultra-luxury sector remains buoyant in Manhattan as buyers at this level are seeking premier assets in a competitive market, often with a long-term investment perspective that is less reactive to short-term economic shifts,” Cantwell observes.
Regionally, Midtown West emerged as the standout, with volume growing from $165.2 million in Q3 2023 to $500.6 million, a 203% surge, accompanied by an 88% increase in listings. The average sale price rose by 61%, demonstrating this area’s appeal to high-value buyers, particularly in economically uncertain times, like in 2020. In Midtown East, volume declined from $99.2 million to $33.7 million, a 66% drop, with listings similarly down by 67%. Downtown also saw contraction, with sales volume halving from $317 million to $157.7 million, and trade quantity decreasing from 14 to 10.
Historically the best performing neighborhood, the Upper East Side experienced declines in both listings and volume, with the latter decreasing by 38%, from $397.6 million to $246.4 million, while average sale prices remained stable. The Upper West Side showed resilience with a 6% increase in average sale price, even as volume fell from $118 million to $93.2 million, a 21% reduction.
Looking to Q4, NYC’s luxury real estate market will likely continue to experience mixed trends across segments. The new development sector’s limited supply may keep trade volume subdued, though high-value deals are expected to keep average sale prices elevated. Re-sale properties may see stable listings but could face ongoing pressure on volume and prices, with performance largely dependent on closings from properties currently in contract.
The $10 million to $20 million range may see a modest decline, in line with historical seasonal trends. Conversely, both the $20 million to $30 million and $30 million to $40 million segments are anticipated to underperform in Q4, continuing their Q3 slowdown. The $40 million+ segment, however, is likely to maintain its strength, potentially exceeding last year’s trade count.
Regionally, Downtown and Midtown East may continue to face challenges, while Midtown West is expected to remain robust, sustaining strong interest and price growth. The Upper East and Upper West Sides may see stabilization with modest price adjustments, though we don’t anticipate significant rebound in trade volume.
As Q4 approaches, Manhattan’s luxury market is likely to remain cautious, with areas of strength concentrated in ultra-luxury segments and select new developments. Seasonal trends could bring some renewed activity in condos and co-ops, but overall market performance will likely remain subdued, particularly in the mid-tier luxury sectors.
