Manhattan home sales jump to two-year high led by cash buyers

[BOSTON] Manhattan home sales jumped to the highest level in more than two years as affluent buyers armed with cash forged ahead on deals.

There were 3,158 completed condo and co-op sales in the third quarter, up 13 per cent from a year earlier, according to appraiser Miller Samuel and brokerage Douglas Elliman. The median price of those transactions was US$1.2 million, a 5.8 per cent increase.

Manhattan’s real estate market is getting a boost from the stock boom and last year’s rich Wall Street bonuses. With that added wealth, many buyers can afford to sidestep high borrowing costs and pay cash. About two-thirds of the quarter’s purchases were made without financing, the firms said. More than 90 per cent of deals above US$3 million were in cash.

“In this market, the greater your net worth or income, the more options you have to bypass elevated mortgage rates,” said Jonathan Miller, president of Miller Samuel. The jump in deals “is skewing to the upper half of the market”.

In another sign that wealthy buyers were the most active, units in new developments, which tend to be more expensive, accounted for 18 per cent of closings, the biggest share in more than six years. The median price of those purchases was US$1.8 million.

Inventory in general has been climbing, but sales are growing faster, and that’s keeping pressure on prices, Miller said. There were 7,733 homes available at the end of the quarter, up 7 per cent from a year earlier. BLOOMBERG