Manhattan Market week ending September 23rd inventory as expected ticked up 7,243 and remains on trend from last year. Pending Sales 3,017; demand is down 6%. Pending Sales matching historical norms. There is a reset in the market. Fundamentally, the market is removing recovery level activity from the pending sale with post-shift level activities. Most likely, Pending Sales will drop below $3,000 before it starts to turn around and normalizes. Buyers, this is an opportune moment. As noted by UrbanDigs, “Buyers have gained notable leverage advantages with the sacrifice of inventory and steep price discounts.”
The Market Pulse measuring supply and demand evidence the market is in neutral territory and may dip into buyer territory and then head upward again in October and November when deals begin to close.
Sellers have begun to reset their listing prices or have chosen to take advantage of the competitive rental market and wait until another seller’s market returns.
Monthly Demand
The chart titled “Monthly Demand Is Essentially Back to Average” depicts how many contracts this industry produces monthly and whether it was above or below the historical average for that month. If it was above, it’s a green bar; below, it’s a red bar. We are coming in just below the historical average and so on trend. This may be a slower season, but that has not happened. The Market Pulse is edging towards a buyers’ market threshold. Supply is ticking higher, and pending sales are ticking lower until mid-October. Buyers should watch and listen because it will tick down and move upward. This is a slower market, so buyers, it’s more in your favor. Leverage.
Mortgage Rates
For a third straight meeting, the Fed raised its benchmark interest rate by 75 basis points — and it’s hardly done. Count on an additional 1.25 percentage points’ worth of increases this year, Fed chair Jay Powell said on September 21, 2022, which would bring the Fed funds rate to 4.4 percent by the end of 2022, and 4.6 percent next year.
The effects of this rapid-fire tightening — a wide consensus expecting yet another 75-basis-point increase in November — will be felt across the labor, housing, and stock markets, economists warn. Here’s what to watch for:
Central banks worldwide hope to cool an inflation rate at 40-year highs by raising borrowing costs.
New Development Sponsor Activity
“NYC’s new dev market shows steady momentum, particularly the luxury tier. The Cortland continues to perform well, but more mature projects like Soori High Line have been waiting for the right buyer. Low resale inventory is likely driving this trend, as reported by Kael Goodman, co-founder and CEO of Market Proof. Manhattan reports 40 contracts totally of $157 million. The activity was up 74% as 40 deals were inked across15 developments. Contracts totaled $157,175,90 with the average unit asking $3,929,999 (-17%) and $2,434 PSF (+9%).
Contracts $4 million and Over
July and September are historically the worst months in the luxury market, and the 3rd quarter is typically the worst quarter of the year. Surprisingly, given rising interest rates and a tumbling stock market, this September has so far managed to ink 66 contracts in the last 4 weeks, performance on a par with previous Septembers. Take a peek at these stats: 2019 was an outlier with only 51 deals, but 2018 had 68, 2017 had 65, and 2016 had 66.
NYC Manhattan housing market has shifted to seasonal trade winds. Steady, she goes.
