Home News New York City’s Luxury Apartment Market Under Pressure in 2023

New York City’s Luxury Apartment Market Under Pressure in 2023

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Sales of the city’s most expensive apartments slowed late last year, and brokers and analysts don’t expect a turnaround anytime soon as the prospect of an economic slowdown weighs on even the wealthiest homebuyers. said.

Bankers, traders and others in the financial services industry have historically used bonuses as down payments, but Wall Street bank executives have warned that payouts will drop significantly this year after a slump in trading in 2022. .

“Bonus season is short, interest rates are high and the stock market is deteriorating,” said Donna Orchan, president of Orshan Realty, which tracks luxury goods sales of more than $4 million. “It absolutely affects luxury buyers.”

Orchan said New York’s luxury market closed out 2022 with a respectable $10.3 billion in sales from more than 1,300 apartments priced at $4 million or more. In terms of signed contracts, the year ranked him fifth in the last decade, but 64% of these deals were done by his end of June, with no activity in the last six months. slowed down significantly.

Interest rates will continue to rise A major impediment to luxury sales In 2023, Broker said. Even wealthy buyers who buy with cash are affected by the impact of high interest rates on financial markets. This is because many people withdraw money from their portfolios to pay for real estate.

“Overall, everyone is losing affordability to some degree,” said Rachel King, a broker for real estate firm Serhant.

Some developers have offered concessions, she added. pay the buyer’s mortgage interest Cover common fees for several years or six months to close the deal.

Ms. King said most of her high-end clients today sitting by Unless you need to buy for a life event such as a new job, marriage, or divorce.

Coldwell Banker Warburg Broker Lisa Chajet said: economic concerns It’s scaring buyers off and prices are falling as a result.

“We’ve had luxury buyers who were worried that a recession was coming would pull back from the very big stuff,” Chaget said. “Some of these large condos are selling well below the asking price.”

The median value of all residential real estate in Manhattan is up 10.2% from 2019.


Ted Shuffley/Associated Press

Luxury real estate in New York City slowed last year but still outpaced cheaper apartments, according to real estate appraiser Jonathan Miller, author of Douglas’ market report Rising twice as fast as the whole. Eliman. Also, the median value of all Manhattan real estate is $1.1 million for him, up 10.2% from 2019.

Even the Manhattan luxury market, which is usually the last segment to fall in price and the first to recover, is starting to slow, according to Garrett Derderian, director of market research at Serhant. This ‘super-premium’ luxury market, defined as properties selling for $10 million or more, saw discounts of around 12% in the second half of last year.

Derderian said the first six months of 2023 are likely to be quiet, but he expects luxury market activity to start picking up by the second half of this year.

Asian buyers, largely absent during the pandemic and historically accounting for 30% of New York’s superprime buyer pool, may reappear as Covid restrictions ease in China. Most of the unsold inventory of wax absorbed During the pandemic with South American, European and domestic buyers, he said.

“There is no more oversupply or unsold stock in the market,” Derderian said. “That, in turn, will push prices higher and put a floor on price declines,” he said.

Write a letter to Kate King at [email protected]

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