The third quarter of 2024 didn’t bring as many new listings as New York buyers may have hoped, but that didn’t stop buyers from forging ahead with home purchases, and by the end of the summer, the luxury housing market in Manhattan was beginning to pick up steam.

While real estate activity is traditionally slow from July to September, the quarter ended with a spike in the number of high-end closings and contracts signed due to declining interest rates and a strong stock market, new reports have found. At the very top of the sector, ultra-luxury homes in the $10 million and $20 million-plus range had the biggest increase in contract activity, up 15.4 percent and 16.7 percent year-over-year, respectively, according to Compass. However, in the broader residential real estate market, the brokerage found that closed sales dipped to 2,694 transactions, a 1.8% decline from Q3 2023.  

“Lower inventory combined with continued higher rates and a lack of sellers willing to come to the market yet, has contributed to slightly lower sales,” explains Tony Sargent of Compass in a statement. Inventory levels are still lacking from previous years as demand continues to outpace new listings. For example, there were only 7,300 active listings in the third quarter, which is 100 fewer than 2023. At the same time, the number of properties listed at $20 million and above declined 10.3 percent compared to the same time last year. 

Elsewhere, the median price—which refers to the middle of the market—rose 2 percent from 2023’s third quarter to $1,150,000, according to Brown Harris Stevens, which can be attributed to a decrease in activity at the high end of the market in addition to a shortage of inventory. 

Last month, the Federal Reserve cut interest rates for the first time in four years, which should alleviate some of the pressure the U.S. housing market has been facing since the pandemic. The standard 30-year fixed mortgage, now clocking in at around 6.12 percent, is well below the nearly 8 percent averaged last year. The good news is that as mortgage rates continue to drop, buyers and sellers are likely to come off the sidelines, and Manhattan will move closer to a seller’s market.

“It seems likely that 2025 will be a stronger year than the past three have been,” adds Frederick Warburg Peters, president emeritus of Coldwell Banker Warburg, in the firm’s report.