Buyers are jumping in before the water gets cold again…
It’s been two months since my last report, as there was actually not much to report, except that we have experienced a return to “seasonality”…meaning August and September reflected a slowdown. But do not be confused, the market is still running at a higher pace than years past. Q3 of this year saw the number of closings hit an 8-year high, with resale prices up 3% over the prior quarter and 17% more than a year ago. These results were purely driven by the supply and demand principle.
Demand outpaced supply. One year ago there were some 9,500 available properties on the market; that dropped below 5,900 by the end of summer, according to UrbanDigs . This occurred because sellers had to adjust prices to meet what buyers demanded; consequently, more and more buyers entered the market with commitments to buy, at a time when interest rates remained at record lows. Deal volume accelerated and the “average days on the market” fell by 25% from a year ago.
September is always a slow month due to the end-of-summer, Labor Day, the beginning of school and the unpredictable timing of the religious holidays. These are always obstacles for the momentum of the Fall market, which is notoriously short to begin with…but what a time to buy. Inventory is beginning to increase, interest rates remain low, pricing has moderated and sellers know that each offer demands attention. Serious sellers know that if they do not secure a buyer by mid-November, they could be stuck with their properties well into the new year.
Foreigners have yet to enter the market in large numbers; eventually though, they will come. At the moment, the only potential obstacle I see to that is the recent strength, since May, of the US dollar, compared with other global currencies. It makes Manhattan a bit more expensive for them. That said, they too will need to respect the probable (inevitable in my opinion) price appreciation we will see in the coming years.
Rentals have seen a complete change of fortune. A year ago it was a complete “dumpster fire” as one of my colleagues described it. If, however, you are looking for a rental now your encountering many challenges. Inventory has tightened and people are struggling to find apartments, as they are swept up at the blink of an eye.
All of this tells us one thing, all the naysayers were wrong. Manhattan is surging and I would say that we are only 70% there. The return-to-work and very simply everybody’s desire to meet back on the playground (which is what NYC is all about…pick your piece of equipment) is the reason why the market is surging on all cylinders. So get your piece of the apple and come play with us!!
Please don’t hesitate to reach out to me if you would like to strategize how best to maneuver this market for your particular circumstances. It requires building a team of mortgage brokers, attorneys etc. I have the resources, the experience and the desire to help. Have a great beginning of Fall and I will report back in November.
Licensed Real Estate Broker
Brown Harris Stevens
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