For the first time in a year, Manhattan home prices in the fourth quarter rose as homebuyers came off the sidelines after the Federal Reserve's pivot led to a plunge in mortgage rates, laying the groundwork for a re-acceleration in the borough's housing market this spring.
Bloomberg cites new data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate, which shows the median sales price closed was around $1.16 million, up 5.1% - the first annual increase since the third quarter of 2022.
Data showed two-thirds of Manhattan buyers paid cash despite the 30-year fixed mortgage rate plunging from a two-decade high of around 8% at the start of November to about 6.61% by the end of December - on the back of the Federal Reserve's rate hike cycle pivot.
Even though the total number of property transactions declined in the quarter, home sales valued at more than $5 million surged - an indication wealthy folks are buying ahead of the spring season.
"The market is giving early signs that it's beginning to rebound," Miller said, adding, "It's not going to do an about-face overnight, but it's trending to stronger performance in terms of transactions and inventory and, to a certain degree, prices."
Bloomberg noted, "Contracts to buy homes in Manhattan — a more timely indicator of demand than closed sales — rose in December from a year earlier ... The increase signals the start of a process in which lower interest rates bring in more buyers, and prompt more sellers to list their homes."
The late-year surge in the Manhattan housing market came after US home prices in October, one month before mortgage rates began to fall, rose for the 9th straight month.
"US home prices accelerated at their fastest annual rate of the year in October," says Brian D. Luke, Head of Commodities, Real & Digital assets at S&P DJI.
"We are experiencing broad based home price appreciation across the country, with steady gains seen in nineteen of twenty cities."
Could lower mortgage rates and tight housing supply unleash another round of bidding wars for the spring season?
