(Sponsored Content)Here are the takeaways from the following:
- It’s a mixed bag as usual.
- Supply-driven market, as in there is a lack thereof.
- 7% rates keep more sellers in place, meaning fewer choices for buyers.
- Demand for these choices will intensify.
- This upward pressure on prices could be tempered by 7% rates.
- That said, 65% of our deals are cash, so perhaps not.
We’ve had the first Fed rate hike since 2023, and most buyers have the same instinct: wait. Wait for rates to come down. Wait for sentiment (the “headlines), to improve. Wait for the market to feel safer. It’s understandable…but in real estate, the moment everyone is waiting can be THE moment the most interesting opportunities begin to surface. So if you’re inclined to buy, you should keep your sleeves rolled.
Here is the part that gets lost in the noise: traditional thinking tells us that when rates go up, buyers understandably step back…true. But right now, it’s the sellers who are stepping back. The real pressure point right now is not demand…it’s supply. A lot of owners are sitting on mortgages near 3%; so moving today could double their monthly housing costs. As a result, they’re not rushing to sell, even if they’ve outgrown their home, want a different neighborhood, or had once planned to trade up. For buyers that leaves less inventory, fewer truly compelling choices and yet, continued competition for the properties that check all the right boxes.
For sellers who do engage, it’s a two-sided coin: yes the scarcity helps your cause, in that you have fewer properties on the market to compete with; however, open houses get quieter, bidding wars become less automatic, and sellers who expected a line around the block may suddenly be open to real conversations. That second part is a plus for buyers. Although not every seller will adjust and not every listing is an opportunity, fewer active buyers create leverage that simply does not exist when everyone’s chasing the same property.
Seven-percent mortgage rates sound alarming…specifically in relative comparison to the artificially low rates of 2020 and 2021. But as always, in Manhattan the story is more complicated than elsewhere; cash is still king, especially in luxury. Nearly 65% of our deals here are all cash; if you consider those properties over $4M that percentage goes up to 90%. So as you can see, buyers at the upper end are not making a decision based on a rate sheet; they’re buying a rare home, in a specific building, on a particular block, because they know that it may not come back to market for years. That’s typically why the luxury condo market remains resilient even while the ‘headlines” insist that higher rates should bring everything to a stand-still.
That’s why the best buyers are not necessarily waiting for a “perfect” market. They are watching closely for the moments when uncertainty gives them room to negotiate, when a seller becomes realistic, or when a great property appears with less competition than it would have had a year ago. Rates can change…and mortgages can be refinanced…but you cannot go back and buy a remarkable Manhattan property at yesterday’s price once confidence returns.
Let’s Go Shopping ! ®
Anyone interested in buying or selling should roll up their sleeves to determine whether the time is right to sell or if there’s a home/investment property out there for them. Who represents you matters…your best investment is often in the broker you choose; find someone with experience whom you feel you can trust.
