One Of The Priciest Real Estate Markets Just Plummeted

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Apartment sales in Manhattan fell by 18% in the third quarter as increased prices and higher mortgages put downward pressure on one of the most expensive real estate markets in the country, CNBC reported Tuesday.

While brokers generally note that a significant decline is to be expected compared to last year, when sales were artificially inflated by a flurry of post-pandemic purchases, some expect that rising prices and mortgage rates, coupled with a weakening stock market, will disincentivize purchases in one of the country’s priciest real estate markets, according to CNBC. For the month of September, the number of total listings for apartments fell just 2.1%, but the number of new signed contracts fell by 46.1%, according to a report by real estate firm Miller Samuel. (RELATED: Mortgage Rates Haven’t Been This High Since Before The Financial Crisis)

While asking prices have risen about 4% to $1.96 million over the past year, so has the average discount, CNBC reported. Houses typically sold at 7% below asking price in the third quarter, compared to 5.6% in the third quarter of 2021.

Nationwide, real estate markets have been cooling as 30-year fixed rate mortgages topped 7% for the first time since 2002. The share of newly listed homes declined by 9.8% in September compared to the same time last year, while the number of homes for sale grew 37.2% year on year in the 50 largest U.S. metropolitan areas, according to real-estate analytics website

“We do see evidence of the market’s slowdown in our third quarter report, but the full impact on sales and prices won’t be known for at least another quarter,” said New York-based real estate firm Brown Harris Stevens in a quarterly report on Manhattan’s real estate market. “That’s because half of the closings in the third quarter of 2022 had their contract signed before May 18, which was when the market began to shift.”

Overall, the number of new signed contracts fell 46% in September compared to last year, from 410 to 221, according to data from Miller Samuel. Part of this decline can be accounted for by a more than 50% slowdown in units priced more than $4 million dollars, since wealthier buyers can typically afford to wait for more optimal times to buy or sell, according to CNBC.

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