By Serj Markarian, Licensed Real Estate Salesperson and Manhattan Market Expert

In an unexpected twist, August sales activity has surged after a sluggish spring. The heightened competition has even sparked some bidding wars. Whether this momentum carries into the fall remains to be seen, but it seems likely as mortgage rates continue to drop alongside the anticipated Fed rate cut in September.

John Walkup, co-founder of Urban Digs, observed, 'The first half of August saw buyers entering the market at a pace surpassing that of the past few years. While it’s not a flood, there’s a noticeable uptick in demand.'

The luxury market, in particular, is thriving. Over the last four weeks, 73 contracts were signed for properties priced at $4M+, surpassing last year’s volume by 20 percent, according to Olshan Realty. This marks the third-highest August for luxury sales in the past decade.

While recent interest rate drops may have had some impact, the spike in activity could also be attributed to sellers adjusting their prices. Sellers who lower their prices are often receiving immediate offers—sometimes even multiple offers.

Buyers may also be motivated by the fear of limited inventory. As interest rates continue to fall, demand is expected to rise, leading to more competition and potential bidding wars, which we’re already starting to see.

With rental prices continuing to climb, more prospective buyers may be growing tired of high rent and are ready to purchase. In fact, Realtor.com reports that some New Yorkers are now considering smaller, less expensive rental units, signaling a potential market shift in the near future.

Nevertheless, new rental developments are on the rise nationwide, with NYC anticipating the biggest growth between 2024 and 2028, with over 150,000 new units expected. This surge responds to the cooling market, as buyers on the sidelines still need a place to live.

For questions on the Manhattan real estate market, connect with Serj Markarian here.