Housing expert: ‘Diehard New Yorkers’ are buying up NYC homes at record pace

Homebuyers are flocking to Manhattan despite rising mortgage rates, according to new analysis, as sales hit a record $7.3 billion in the first few months of the year.
According to the report by Miller Samuel and Douglas Elliman, the number of sales in the New York Borough reached 3,585 in the first quarter of 2022, a year-on-year increase of 45.9%. That revenue increase was 48.9% above pre-pandemic levels, marking the company's third consecutive quarter of record revenue.
“What we've seen is that there are die-hard New Yorkers. You want to be here. You've been here a long time. They took advantage of the COVID rebates to trade. They bought their homes forever. They're renovating them," Kirsten Jordan, real estate consultant to Douglas Elliman and cast member of "Million Dollar Listing," told Yahoo Finance Live. "We're lucky here because we have many different groups of buyers who are interested in our product."
A man views advertisements for luxury apartments and homes in the window of a Douglas Elliman Real Estate for sale store in Manhattan's Upper East Side in New York City. (Source: Mike Segar, Reuters)
Buyers face stiff competition
Would-be homebuyers aren't giving up anytime soon, even as record-low inventories and rising prices characterize a historically competitive spring market. According to the survey, even though mortgage rates exceed 5%, more and more buyers are moving back to the cities.
Demand in the city remains red hot as list inventory fell 4.4% to 6,906 for the third straight quarter, according to analysis by Miller Samuel and Douglas Elliman. At the same time, the number of delivery months -- or the number of months it takes to sell all supply inventory at the current selling rate -- was 5.8 months, 34.1% faster year-over-year and a 23.7% increase from before the pandemic.
As property prices soared -- with median selling prices up 10.7% year-on-year -- buyers had to act quickly, resulting in a blistering pace of the market. But Manhattan isn't the only place where buyers are having a hard time snagging a listing. Buyers face competition across the country – although this could ease as interest rates continue to rise.
“Outside of New York City and outside of these big cities, we're seeing a shortage of inventory, and of course, rising mortgage rates are forcing buyers to regroup and think about what they're going to do. ' Jordan said. "We're seeing buyers rushing to try and make purchases so they can hold on to those rates before they move higher."
Still, rising rental rates and affordability concerns are causing some buyers to stop and really consider what their budget can handle.
"A lot of these properties have had 20 bids and now they're getting five bids," Jordan said. "So it's still a strong market, it's just not insanely hot."
Homebuyers looking for cozy backyards and more office space are waging bidding wars in the suburbs around New York City amid the spread of the COVID-19 pandemic. (Credit: Wang Ying/Xinhua, Getty Images)
Property prices are expected to increase through 2023
Homebuyers in Manhattan don't take much of a break when it comes to their budget.
The median price for apartments in Manhattan rose 19% to just over $2 million compared to the first quarter of last year. According to the analysis, the market share of high-end sales remained strong, with sales at or above the $4 million mark accounting for 11.1% of all sales - the highest share in two years.
Revenue around the $2 million mark rose 30.2%, its highest market share ever, while the average price per square foot rose 16.5% year over year to $1,616. Cash buyers also prevailed, holding 46.9% of sales for homes under $500,000 -- while cash buyers for sales above the $5 million threshold accounted for 56.3% of all sales.
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