Although we are being blessed with some lingering summer weather, the fall market in NYC has officially commenced. The fall market tends to exhibit accelerated activity after the slower paced lazy days of summer. Certain aspects of the historic seasonality in our market have become less pronounced, but we will still see more buyer activity from now until the winter holidays.
There has been a lot of news of late about how we are in a ‘buyers’ market’ here in NYC. This is mostly true, but there are various market segments and property types that are performing differently; we have had some of our listings sell quickly at or above our asking price. However, we are experiencing a recalibration of pricing, as buyers and sellers adjust to changes in our marketplace. This is not one of our typical cyclical market swings, but rather a more fundamental correction based primarily on policy changes and global macroeconomic trends.
The LevinKong Team looks to market pulse – that is, the percent of actively listed properties that are in contract – to determine the strength of different market segments. This is also how we identify the best opportunities for our clients. The market as a whole has a market pulse of .36, meaning 36% of available inventory is in contract. For co-ops, this number is .43 and .26 for condos. The co-op market is outperforming the condo market, and lower priced properties are far outpacing and outperforming higher priced units. Sales activity is up 10% from last year in the co-op market and down approximately 3% in the condo market. Co-ops priced under $1M have a market pulse of .51 and condos priced above $5M are at .17. Our luxury property and new development markets are the most vulnerable segments, where an oversupply is allowing buyers to achieve fantastic results.
First time homebuyers and buyers in lower price points are the ones most tied to interest rates, as they typically take advantage of the largest percentage of financing possible. Although mortgage rates stopped their downward trend and ticked up a bit, they are still near historic lows. This is injecting demand into homes priced under $1.5M – and even more so with homes priced under $1M. These brackets are where we are seeing the most activity.
We recently helped clients strategically take advantage of market conditions to maximize their benefit of upgrading in this market. We priced their one-bedroom co-op in Chelsea under $1.5M and had multiple offers in less than two weeks on the market, ultimately achieving their asking price. We were then able to procure a multi-million dollar three-bedroom condo unit in Brooklyn from a developer at $1M under the original list price. Upgrading from a smaller to a larger property is a surefire way to win in the present market. The fact that they went from a co-op to a new construction condo also allowed them to take full advantage of current conditions.
Most articles and reports take the entire market and aggregate all the different market segments into one story. This is easy to do and it paints a very easy to understand picture. However, our market doesn’t work that way, and this is especially true in the current climate. Understanding the nuances and targeting specific market segments at optimal times is paramount to achieving real estate success in this complicated NYC market.
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. Our team can also offer a wealth of knowledge regarding specific 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!