The days are getting longer and the weather is getting warmer – two surefire signs that the long-awaited spring season is fast approaching here in New York City. The spring season is typically our most active in New York City real estate, as business tends to heat up as buyers and sellers come out of hibernation, shed their winter layers, and put their minds to the buying and selling of real estate.
We have been speaking of the overall slowdown and downward shift in the NYC real estate market for quite some time. Although we are not seeing upward pricing movement in most segments of the market, we are seeing an increase in buyer activity and a willingness (for the most part) for sellers to accept the current market conditions and price in-line with buyer expectations.
The city’s diverse real estate market is not a one-size-fits-all market. We are observing profoundly different trends and opportunities in different price-points, neighborhoods, and property types. One metric that we have been keen to follow is a particular segment’s ‘market pulse’ – that is, the amount of currently available inventory in contract at any given moment. We also pay great attention to supply and average price per square foot.
For Manhattan co-ops, 50% of all currently available inventory is in contract; the market pulse is .5. This is a healthy market indicating a relatively even playing field for buyers and sellers. Supply is up 15.2 from last year and the average price/sq’ is relatively unchanged from the prior year. Condo property in Manhattan is not faring as well, and there is a lot of potential for opportunistic buying –particularly so in the new construction market. The market pulse for Manhattan condo property is a buyer-friendly 0.28; 28% of available inventory is in contract, with supply up 24% year over year, and prices down an additional 3% approximately.
Within these wide bands, certain neighborhoods and segments are performing better or worse than the market as a whole. For instance, one of our best performers is the co-op market in the Flatiron neighborhood. One-bedroom co-ops in this segment have seen the market pulse double from this time last year, as almost all the currently available inventory is in contract and supply is down 14.3%. On the other side of the coin, the 2-bedroom condo market in the Battery Park City neighborhood is a less enviable market for prospective sellers. Here, the market pulse is 0.14, meaning a meager 14% of available inventory is in contract and supply is up a whopping 89% year over year. There are definite winners and losers depending on market segments, and it’s more imperative than ever to stay ahead of the trends.
The real estate market as a whole (nationwide) received a much-needed boost last week as mortgage rates fell drastically. To be more specific, they dropped more in the past week than they have in any one-week period in more than a decade. We have seen a spike in buyer interest level since the rates began to drop, and this further reduction will certainly push many off the fence and into action. A 30-year fixed loan is on average 4.03%, a new 52-week low. This is down a full percentage point from the 5.05% they hit last October.
“Despite negative outlooks by some, the economy continues to churn out jobs, which is great for housing demand,” said Freddie Mac. “We have recently seen home sales start to recover and with this week’s rate drop we expect a continued rise in purchase demand.”
As always, please reach out with any questions on how you can take advantage of these current trends, or how to protect your real estate assets. We can also offer a wealth of knowledge regarding specific trends or segments of the market. The LevinKong Team is available to serve all your New York City real estate needs, and those of your friends, family, and colleagues. Please let us know how we can assist you!