NYC Real Estate - May 2022
Nishant Sondhi
Real Estate Investment Fund Manager | Specialized in Passive Investing for Multifamily & New Developments | Data-Savvy, Transparent, Committed
Greetings and I hope you are doing well.
Manhattan Overview:?May was a good month for the Manhattan Real Estate market. However,?macro headwinds such as rising mortgage rates and?stumbles in the equity and credit markets have started to impact the market, which can be seen with a reduction in contract activity.
-?The sales?market is?slowing as the?rental market?heats up.
-?The pace of?contracts signed?continues above?2019's pace but?has slowed?noticeably?compared to 2021.
-?After remaining on?par throughout the?first quarter, the?overall level of?contracts signed?has fallen behind?last year's pace.
Mortgage Rates - now over 6%
Most experts expected mortgage rates to rise this year, but it happened faster than many predicted, with rates on 30-year fixed loans breaking through 5 percent in April to the highest level in more than a decade. That means it’s more important than ever to compare rates before selecting a lender.
?- A mortgage application to purchase a home fell 7% for the week and was 21% lower than the same week one year ago.
- Refinance demand dropped 6% for the week and was down 75% year over year.
Date Source: Mortgage Bankers Association’s seasonally adjusted index.
Manhattan Negotiability
The most recent?discount data?suggests discounts remain low,?however, slowing?deal volume?implies higher?discounts are likely?on the way.
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Median Listing Discount in May was?3.2%.
My Views
Sellers?→ Sellers have had a good market in NYC, in the terms of contract activity, in both Manhattan and Brooklyn since early 2021. However, the past few weeks have seen a notable slowdown in contract signings. For a Seller, it is important to study the local dynamics around the property to understand how macro headwinds are impacting their specific neighborhood and pricing.?
Buyers?→?There is a potential window of opportunity for buyers in the next few months. Buyers should be well prepared and study the inventory, understand their financing plan, and identify potential buildings. Stale properties (properties that have been in the market 75 days or longer) could be a window of opportunity as they have not traded yet, and there is a possibility that the seller will have a price cut soon to get their price to 'match' the market. The coming summer months could be the widest window of opportunity for buyers in the near term, especially for rate agnostic buyers.
Have questions about NYC market forecasts, trends, or anything else real estate-related? I'd love to connect - reply to this email to schedule an appointment.
Date Source: UrbanDigs
About Nishant Sondhi:?Nishant is a Real Estate salesperson in Manhattan and Brooklyn, and specializes in Residential Real Estate. He is passionate about helping buyers and sellers navigate the New York market, save them thousands of dollars, time and make the process enjoyable. His strong analytical, marketing, and negotiation skills developed during his MBA and over 10 years of sales experience give him a unique edge to best serve his clients.