The Manhattan townhouse market in 2023 experienced a slowdown in momentum when compared to the robust performance observed in 2022 and 2021. This deceleration can be attributed primarily to the rising interest rates and scarcity of inventory, fostering a cautious atmosphere for both buyers and sellers. Buyers have largely been in "waiting" mode to see what the market will do amid this uncertainty, only feeling motivated to act where they feel there is good value or are provided a turnkey, renovated home. Simultaneously, sellers, who are for the most part in strong financial position, have also been waiting the market out, holding firm on their pricing believing interest rates will decline and the market will bounce back. This stand-off accounts for much of the slowdown in volume.
The neighborhoods which fared the best year-over-year were Midtown East, Gramercy, and Tribeca/Soho – traditionally neighborhoods which have relatively lower volume, allowing a few standout sales to make a big impression on the market.
4Q2023 showed signs of improvement quarter-over-quarter in comparison to 4Q2022 as inflation and interest rates eased, defying the usual holiday slowdown and displaying positive momentum for 2024. Despite a reduction in overall transaction volume this year, pricing has remained stable, suggesting resilience in the market amid external uncertainties.
