Manhattan’s rental and sales prices have risen by double-digits year-over-year, while rental and sales listing inventory has decreased during the same period. The current NYC housing sales market favors sellers based on a relatively low number of days on the market (DOM) in recent months. Housing sales have gotten faster since the pandemic started in early 2020. Although many are moving into Manhattan, the net migration is still below zero, showing that slightly more residents are leaving Manhattan for other areas.
New York City Employment Status
The recent employment data from the U.S. Bureau of Labor Statistics (BLS) reveals that total employment has recovered by 6.7% in NYC over the past year (May 2021 vs. May 2022). As employment increases, unemployment rates are falling; Although the City’s unemployment rate peaked at 21.0% in May 2020 (two months after the pandemic started), the rates have gradually decreased and reached 6.2% in May 2022. Furthermore, the gap between the national and NYC unemployment rates has been narrowing since May 2020, when it was at its widest. As of May 2022, the unemployment rate in the United States was 3.6%, the same as the average rate before the pandemic.
Migration Trends in Manhattan
Although there was a sharp increase in the number of out-migration (from Manhattan to other regions) during the first month of the pandemic, the balance between in- and out-migration has been significantly stabilized over the past year. Most recently, we noticed a modest reduction in net migration, indicating that more New Yorkers moved to other regions during the summer after the school year finished in May. We expect to see the net migration in Manhattan will rise in the fall, and thus, the demand for housing is also predictable to increase, according to both job and migration trend data.
Median Rental Price Changes: Manhattan
We observe a dramatic rise in rents in almost every neighborhood in Manhattan. Specifically, between May 2021 and May 2022, the median rent jumped by 39.7%. At the sub-market level, downtown Manhattan experienced the greatest year-over-year rental price growth (44.4%), while the neighborhoods in upper Manhattan showed the lowest growth rate at 15.3%. During the same period, we find a relatively more significant increase in rents for two- and three-bedroom units (39.9% and 43.0%, respectively) compared to smaller units (studios: 36.4%, one-bedrooms: 36.2%). This suggests that during the recent year, there has been an increase in the desire for more space than there was previously.
Manhattan Median Sales Price Changes
Manhattan housing sales prices are rising for both property types (condominium and cooperative). Particularly for the condo prices, the median home values grew by 15.4% between May 2021 and May 2022. The economy as a whole is experiencing rising inflation, but it appears that the housing sector is being impacted more severely.
We find that the low housing sales inventory in Manhattan is one of the factors directly influencing the recent spark in housing values. According to the inventory data obtained from StreetEasy, the number of sales listings dropped by 17.3% in Manhattan between the first quarter of 2021 and the same quarter of 2022.
The Number of Residential Properties Sold in Manhattan
The sales data obtained by the NYC Department of Finance reveals that the monthly number of residential properties sold in Manhattan fell significantly in the second quarter of 2022 as compared to the same quarter last year (-13.5%) due to the recent surge in housing prices and mortgage rates and a resulting drop in demand for home purchases. However, compared to the previous quarter (2022-Q1), we observe a slight recovery of sales activities in the second quarter of 2022 by 7.8%.
Days on Market
In addition, we observe that the current NYC housing sales market favors sellers given a relatively low number of days on the market (DOM) in recent months when we examine the median number of days properties spend on the market each month. Homes usually sell more quickly in the spring than in the winter due to the weather. Therefore, we compare the average DOM for the second quarter of 2022 with the average DOM for the same quarter last year and find that the DOM dropped by 18.1% over the year.
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