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Welcome to October!
As we head deeper into the Fall, the city’s real estate market continues its seasonal shift. In this month’s update, I cover some of the latest trends, opportunities, and challenges that face sellers and buyers in our market. Whether you’re looking to make a move or simply stay updated on the ever-changing property landscape, I hope you’ll find the analysis, news and events in this month’s newsletter to be a handy and enjoyable guide.
So, what happened in September? Finally, some listings! Weekly new listing activity was substantially higher. While new supply for September was lower on a year over year basis, the increase over August was a welcome improvement. Here’s a quick summary of some notable market news and activity over the past month:
- With summer in the rearview mirror, there’s been a jump in new supply and open house traffic. Our most recent survey showed stronger attendance across the 2 & 3 bedroom sectors of the market. Brooklyn continues to see more activity than Manhattan. Additionally, there’s been a pick-up in interest in the luxury home sector by higher-end buyers. Overall, sellers have been seeing good traffic on their listings and buyers have a more diverse range of options across the city.
- Certain markets have been stronger than others. In Park Slope, prime properties are still competitive with multiple offers over asking price. In certain other markets and for less prime or overpriced properties, demand has been sluggish, resulting in discount opportunities for buyers.
- Manhattan new development inventory is at its lowest level in over a decade. As we speak, most projects are fully constructed with move-in-ready inventory. With less replacement product in the pipeline and greater absorption on move-in-ready properties, we may see a supply crunch and upward price pressure in the next couple of years.
- While there’s been a lot of talk about commercial conversions to residential properties, commercial property experts believe that it is cost prohibitive for most office buildings to be converted. As a result, that sector of the market is not expected to be a substantial source of housing supply in the future.
- The Federal Reserve left rates unchanged. This is the second time in the past three meetings they have held rates steady. The Fed indicated that they expect to hike rates one more time this year.
- Mortgage rates are higher and many expect high rates to remain through early next year. According to Zillow, the current average 30-year fixed mortgage rate fell 7 basis points from 7.35% to 7.28% on Friday (9/29) but is up 16 basis points from the previous week’s average rate of 7.12%. While rates are generally up through September, some market experts are expecting rates to come down toward the early / middle part of next year.
- Some economists increasingly believe that pandemic related supply disruptions and the Ukraine war played the biggest role in accelerating inflation. As interest rates have risen, inflation has declined from its peak of 9.1% in June 2022 to 3.7%. Yet the unemployment rate has scarcely budged since March 2022, despite the 11 rate hikes. As a result, with supply normalizing, some economists believe that taming of inflation may be possible without triggering a deep recession.
- While higher rates are a challenge to many, there are a variety of strategies that can help manage the financial impact including: discount points, rate buy downs, adjustable-rate mortgages, shorter maturity mortgages and first-time home buyer incentives.
Please enjoy the analysis, news and events in this month’s update and let me know if you have any questions or feedback.
There are plenty of opportunities out there. Let’s talk about it! Have a great month and feel free to contact me for assistance on any of your real estate needs.
All the best,