“70% of New York City homes purchased in the final quarter of 2023 were bought with cash

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The median sales price for a Manhattan apartment was $1.15mn in the fourth quarter, according to real estate agency Douglas Elliman. That was up 5 per cent from the same period a year earlier, and approaching the record $1.25mn median sales price reached in the second quarter of 2022 — just as the Federal Reserve was beginning to raise interest rates.

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New York’s property supply crunch has brought vacancy rates down from almost 4.5 per cent in 2021 to 1.4 per cent, below the pre-pandemic rate of 3.6 per cent, according to the New York City Comptroller. “The affordability in New York is rough right now,” Liebman said. “It’s taking a lot of people out of the market.”

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More than two-thirds of home sales in Manhattan last quarter were cash purchases, a record, as high rates on mortgages deter all but the richest buyers.

As mortgage rates hover around 6 per cent, nearly 70 per cent of Manhattan homes purchased in the final quarter of 2023 were bought without a mortgage, according to Pamela Liebman, the chief executive of real estate brokerage Corcoran. Cash purchases jumped from just 55 per cent of transactions in the same period in 2022.

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Challenges facing buyers in New York have been exacerbated by a chronic shortage of housing that developers have blamed, variously, on regulations that have limited landlords’ ability to increase rents as well as the lapsing of a decades-old tax incentive that underpinned many new buildings. New residential construction project permits also fell sharply last year, according to the Partnership for New York City, down 55 per cent in the final quarter of 2023 from the same quarter of 2022.

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A Corcoran report found a 4 per cent increase in new leases in Manhattan and Brooklyn in January of 2024 compared with the previous year, while rents rose to an all-time median high of $3,950.

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