In August 2025, the pace of Manhattan’s housing market slowed, which is typical for late in the summer, but prices held steady month-over-month and remained higher than 2024. Total contracts signed dropped from 898 in July to 811 in August, a 9.7% decrease, but prices remained resilient. The median price per square foot was $1,400, higher than last August (+3.24%) and only slightly down from July (-1.89%), despite the significant drop in activity. Homes spent an average of 72 days on the market, which is about a week longer than in July. Recent year trends show a clear pattern of demand picking back up in September and we expect the days on market to drop and the number of contracts signed to rise.
The volatility index, which compares the number of homes for sale to the number in contract, fell from 2.06 in July to 1.85 in August.. Since anything above 1 on the index points to a buyer’s market, conditions still favor buyers, though slightly less than in July. With prices relatively flat and listings moving more slowly, the fall season will test whether the usual September rebound in activity gives sellers a bit more leverage.
Lower mortgage interest rates also shaped the market in August, contributing to the increased price and pace year-over-year. This month, the Fed delivered a 25 basis point cut and signaled a total of 50 basis points in cuts for the rest of 2025. This is exactly what the Fed was expected to do, so this was already reflected in mortgage pricing. Mortgage rates had already drifted slightly lower through July and August.
Best Wishes,
Collin Bond, Esq. and Boris Fabrikant, Esq.
