Monthly Newsletter – September 2023
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I hope you had a nice summer. As we head into September, it’s a great time to reflect on the market and consider what lies ahead.
Over the past month, the market operated at a pretty slow pace. While this is typical for August due to seasonal factors, this year’s deceleration was notably more pronounced than in prior years. Although both supply and demand experienced a downturn, it was supply that saw the more substantial decline. As a result, given the relative strength of demand offsetting lower supply, we continue to observe price support in the market.
While early September typically experiences a post-Labor Day lull, activity usually picks up towards the end of the month and into October. Hopefully, we begin to see that happen soon.
One factor weighing on the market is the higher mortgage rates we’ve seen as of late. Nationally, fixed-rate 30-year mortgages have hovered in the low 7% range. This has impacted affordability for homebuyers and presented challenges for potential sellers needing to finance their next property.
Given the impact of rates on affordability, it’s prudent to shop for the products that fit best. Some buyers have been exploring seven-year adjustable-rate mortgages to secure a lower initial rate with plans to refinance down the road. Additionally, certain banks are offering attractive incentives for first-time homebuyers.
Recently, some of my clients have expressed interest in new development and multi-family properties. New development can offer advantages over resale in terms of inventory availability and reduced competition during the offer phase. Multi-family properties can appeal to buyers looking to generate passive income, leverage tax benefits, and mitigate some of the impact of higher interest rates.
When thinking about the market and what you’re reading in the headlines, it’s important to remember that NYC real estate is not a single market. Instead, it’s comprised of diverse micro-markets across the city. Performance can vary dramatically by neighborhood, property quality, and pricing strategy. Navigating these micro-markets requires an ability to determine the nuances and quickly identify opportunities as they present themselves. So, keep your eyes open, understand your goals and constraints, and be prepared to act when the time is right.
In this month’s newsletter, I’ve included some market reports, informative articles, and events I hope you’ll enjoy. Have a great month and feel free to contact me for assistance on any of your real estate needs.
All the best, Steve