New York City’s third quarter closes with Gotham still a strong buyer’s market as described by Rocket Homes, in spite of a 5.7% increase in median sold price over last year, and in spite of widespread predictions from sources including Forbes that the bear’s turning bullish. A factor in the September numbers is a 4.1% increase in available metropolitan inventory, up to 28,439 homes for sale in September 2022 over 27,312 one year ago. This growth is widely attributed to relocation including downsizing in response to COVID-19, and the fact that many potential buyers have already decamped to the Catskills or Hamptons.
Manhattan had under 800 contracts signed in September 2022, the lowest figure in two years and a 24% decline versus last year. While this was the sixth consecutive month with a double-digit annual decline, contract activity was still 28% higher than in September 2019. Despite higher interest rates and stock market volatility, buyers continued to signal a willingness to transact as days on market declined annually for the 18th consecutive month. Sellers found buyers in four months on average, down 29 days versus last year. All price ranges saw less contract activity versus a year ago, with the over $5M market falling by half. Midtown saw activity decline minimally by 7%, while Financial District/Battery Park City fell sharply by 42%.
Today, the median sold price in NYC is $850,223, at $645/per sq. ft. The biggest jump is evident in the sale of residences with 5 or more bedrooms listing at $1.1 million, a luxury sector where prices have climbed 11.2% since September, 2021. A jump of 7.2% has been measured in 3- and 4- bedroom homes during the same time-period. Single-bedroom properties jumped by 2.4%, while the price of two-bedrooms dropped by 0.1%, the only category showing a reduction.
While slightly more than half of the homes sold in New York were close to asking price, 11% -- 259 homes-- were sold above the asking price. Slightly over one-third of the sales, or 376 homes, sold in under 30 days, a decrease of 4.1% in time on the market over last year.
Although the current market reflects an increase in inventory, some experts caution that low inventory in no longer the trump card it was a couple of quarters ago. Sellers may be advised to compete purely on price to prevent listings lingering on the shelf. Volatility in stocks, bonds, and crypto may factor in the long-predicted market shift from the 2020-era sugar-rush of short supply and frenzied demand.
The New York State Association of REALTORS®, Inc. (nysar.com) reported in August describes the environment of existing-home sales as “softening” nationwide. A national increase 16.1% over in the median sales price of a home since September, 2021 has been reported by the group, which also records a 13.2% bump in average sales price over the same period.
Summer 2022 is considered a season of change for the national market, defined by a 33-year low in housing affordability. National Association of Realtors (NAR) posits that the worst of inflation may be over, predicting a national slowing in price growth, making the market still more buyer-friendly. As the specter of COVID continues to recede, displaced New Yorkers are trickling back into their city as the weather, and the market, cools.
Additionally, slightly optimistic analysts offer the possibility that construction may resume, with a rebound hoped for in 2023. This trend would offset the tremendous losses in construction employment endured by New York City as the epicenter of the COVID-19 crisis. In March 2020, Governor Andrew Cuomo issued the “New York State on PAUSE” executive order, a decision which accounted for the loss of 44,400 local construction jobs and nearly 20 percent of the industry’s job losses nationwide, according to the Office of the New York State Comptroller. Current spending is flat, but construction industry sources including New York’s Department of Building (DOB) cautiously report that NYC’s development “reopening” is now underway, including resumed work on more than 30,000 non-essential sites where activity was halted in accordance with Cuomo’s mandate.
Nuanced market conditions challenge agents to stay ahead of the curve in order to meet client needs effectively for the greatest return.