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Mixed signals:
- There’s been more new inventory, but the overall market does not feel that abundance, as it’s still down 9.8% Year over Year…and Monthly Contract Activity has fallen -20.2% from this time last year.
- While Q3 headlines reported strong deal volume, it’s actually lagging news which reflects activity from the delayed Spring selling season. Even with constrained inventory (when urgency peaks), deals are less frequent and taking longer to consummate; buyers (the “waders”) are taking their time…methodical, but in it to buy.
- The luxury market, above $4M, where nearly 90% of all deals are paid for with all cash (and less affected by rate increases) continues to lead the other sectors (see UrbanDigs’ leverage chart).
- The rental market’s typical Fall price relief has not materialized. Higher interest rates and moving costs have many staying put, meaning less turnover and less inventory to choose from.
People always ask, “how’s the market?” That fact is it’s all over the place. Why? Innumerable factors in the overall sentiment of this space, but also politically, geopolitically, economically. It feels…I don’t know (?)…and everyone seems to feel the same way. The fact is, it’s a weird market; it’s entropic. As always, there are mixed signals but this time a bit counter-intuitive. We’re seeing some divergence, where there have been more resale listings, yet contract activity has softened and yet prices have remained constant. The anomaly to that, again, is that the luxury sector is leading the pack. It is neither a boom nor is it a bust.
So what do we make of all it? Well, there’s one constant in Manhattan and that is that virtually everyone wants to buy. That sustains a reliable and core level of demand. The marketplace here is VERY efficient; there is always enough demand for deals to get done…and at good prices too. Perhaps it’s not as much as a seller might like; but if properly exposed to the marketplace, they should feel assured that they have gotten market value. I always say, you have to sell into the market you have been given.
In this, we do recognize there is a difference among the buyer pool: there are “waders” (those intrepid buyers that recognize cycles and buying opportunities with less competition) and then there are the “waiters” (those who need to hear the birds chirping before they engage…when everyone else comes out too). The “waders” are always out there, sleeves rolled up, churning through the market, methodically chipping away at their process and negotiating with sellers. The “wait”ers are the ones who want the skies to clear; they want all bad news to go away before they jump in. There’s lots of those folks. You have to choose your path.
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