May & 1/2 June Results Are In - The Market is Shifting

The Fed recently enacted several interest rate hikes in an effort to rein in inflation. This is having a significant impact on the national market and our market here in Manhattan.

 Please find Elliman’s May 2022 Contract Signed Report here. Up until the end of May 2022 Contract Signing has been comparable to 2021 - bidding wars were not uncommon, and we saw ~15% of homes sold above asking price. However, given the market is changing dramatically now, here are my real-time updates on where the market is headed:

 Fewer Contracts Signed - The number of signed contracts is down 34%. Buyers are pausing to digest the new balance in their portfolio due to the stock market correction. They are also recalculating their new monthly payments due to interest rate hikes while sellers have been hesitant to adjust prices.

 Median Sales is Price Up - The median price is up 13.6% compared to a year ago. This is likely contracts that were negotiated during May, and we expect this figure to fall during the coming months.

 Discount to Asking Price is Low - The discount to asking price is still low at 3.1% compared to the recent average of 6% and we expect the discount to increase during the next few months as sellers capitulate on pricing to get deals done and the market finds its new equilibrium.

 Buyers, this is a great time to be in the market. There are more homes to choose from, sellers are becoming more negotiable, and interest rates are likely to increase further later in the year. There is also less competition from other buyers during the summer. Sellers, let’s set a time to discuss strategy. Depending on whether you are buying back into the market, it might be the right time to strike, or it may be best to hold or rent (rents are at an all-time high!).