New York City’s real estate market presents a layered conundrum rather than a straightforward housing shortage. While Manhattan has around 6,500 available apartments, buyers often perceive a lack of “good” inventory—highly desirable units in prime locations or new developments. This results in significant demand for specific properties while less desirable inventory lingers unsold.
Though Manhattan’s “months of inventory” metric—currently at seven months—suggests a market near historical balance, brokers and buyers are vocal about the perceived scarcity of high-quality homes. Many available units are criticized as overpriced, outdated, or in less desirable buildings, leaving them languishing on the market. At the same time, specific properties in sought-after locations spark bidding wars, creating parallel housing realities.
The pandemic-era has further complicated the situation, exacerbated by high mortgage rates holding back the sector. Adding to this is the perception of the parties involved: sellers expect to achieve the peak prices of a few years ago, while buyers are delaying purchases, hoping for better opportunities, not satisfied with the existing negotiation opportunities. So, while supply and demand seem balanced on paper, they are not in practice.
New York’s challenges are distinct from those of national housing markets plagued by genuine shortages. Here, it’s more about meeting heightened buyer expectations, particularly for new developments or historic properties in coveted neighborhoods. With a significant increase in supply over the next 5-10 years, an improvement is expected. Still, for now, it remains a sluggish market where quality trumps quantity, the best properties are increasingly sought after, and those that do not meet demand linger, waiting for significant price cuts.
