On Wednesday, The New York Post reported that the price of apartments in Manhattan is dropping.
The article reports:
Manhattan apartment prices fell 5.5% year-over-year in the fourth quarter of last year — the first time that residential real estate values in the borough dropped since the second quarter of 2020.
In the last quarter of 2022, co-ops and condominium apartments in Manhattan were sold for a median price of $1.1 million, according to a report by appraiser Miller Samuel Inc. and brokerage firm Douglas Elliman Real Estate.
Even though sales and prices were still higher compared to the fourth quarter of 2019, there was a sharp drop in listing inventory, according to the appraisal.
The median price of condos and co-ops sold during the fourth quarter of 2019 was $999,000.
The combination of higher interest rates and high prices have led to lower demand, the analysts wrote in their report.
The article notes:
Of all transactions in the fourth quarter of last year, 55% were all-cash deals — the highest proportion since Miller Samuel and Douglas Elliman started tracking these trends.
Analysts do not believe that the fourth quarter is the start of a severe drop in home prices.
The $1.1 million median sales price in the fourth quarter represents the seventh consecutive quarter above that threshold.
Although I suspect that the general slowing of the economy plays an important role in the drop in home prices, I also wonder if public safety concerns about living in New York City are part of the problem.
On November 3, The New York City Police Department released their crime statistics for October 2022:
On enforcement, NYPD officers in October 2022 made 4,367 arrests for complaints of major felony crimes, a 16.5% increase over the 3,749 arrests for major felonies in the same month last year. Arrests for major felonies are up 25.8% (39,742 v. 31,582) so far in calendar 2022, compared with the first 10 months of 2021.
Overall index crime in New York City increased in October 2022, by 5.9% compared with October 2021 (10,930 v. 10,324) driven largely by a 19.3% increase in grand larceny auto (1,244 v. 1,043), a 9.6% increase in grand larceny (4,564 v. 4,163), and a 8.9% increase (1,388 v. 1,274) in burglary.
Those numbers show a significant increase in crime. I have to believe that would have some impact on the housing market in the City.