December Newsletter: State of NYC Real Estate Market
Happy December!
As 2022 comes to a close, it's time to indulge in the festive spirit. Whether you're spending time with friends and family, strolling snow-covered streets, or popping sparklers, we hope you have a great December!
In this post-Thanksgiving, pre-Christmas period, we're seeing a surprising number of optimistic reports on the state of the economy and the future of interest rates. As of Dec. 1, mortgage rates had fallen for the third week in a row, and CPI numbers released in early November showed that inflation had dipped much more than expected. November payrolls and wages also defied expectations, as did early holiday spending. While we're certainly not out of the inflation and recession woods yet, Fed Chair Jerome Powell indicated the central bank could start slowing its aggressive rate hikes as soon as this month.
December is the time for New Year predictions, and when it comes to the housing market, the prognostications are mixed. Economists from the Mortgage Bankers Association expect to see a recession in early 2023 but also forecast that mortgage rates will drop to 5.4% by the end of the year. Meanwhile, Realtor.com's Housing Forecast 2023 sees rates landing in the 7.4% vicinity while inventory, rent costs and home sales prices rise. The word among some New York City circles points to a brisk spring season driven by a fair amount of pent-up demand.
Frankly, the only thing that is certain is uncertainty. For the time being, buyers will need to be patient and ready to refinance later if the right home becomes available. As the saying goes, "Date the rate, marry the house." Sellers shouldn't be discouraged: Prices are holding steady, and there are still plenty of prospective buyers in the marketplace.
Real Estate in the News
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Global Trends Impacting Real Estate in 2023
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Market Updates
According to UrbanDigs, 925 new listings entered the market in November. While that's lower than both the prior month and year, it's not far off of the historical average of 1,003 new listings during this traditionally slower month. November signed contracts dipped just 2.9% month over month, while closed sales dropped 38.2% since last month (based on preliminary data). The median discount rate for November continues to hover around the 4% mark, while the monthly absorption picked up slightly.
According to the Olshan Luxury Market Report, which analyzes data for Manhattan weekly contracts signed at $4 million and above, November results have been a story of peaks and valleys. The month started slow, with just 14 deals totaling $90.95 million — the slowest first week of November since Hurricane Sandy brought the city to a halt in 2012. The market roared back in the second week of November, with 24 contracts signed totaling $219.1 million. That's 14% more contracts than in the same month in pre-pandemic 2019 and 39% more in total dollar volume. Fueling the rebound were seven properties that closed above $10 million — the highest number of properties in that price range to sell in one week since May 2022. The week of Nov. 14 marked 17 closed deals at $172.5 million, and Thanksgiving week was relatively brisk with 15 contracts at $132.1 million, well above 2019's holiday performance.