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November 2023 Market Recap

Though interest rates have dropped substantially in the last few weeks, it was not enough to boost activity levels which continue to lag behind seasonal averages. After an 18 month slog, sellers are adjusting as both asking prices and closed sale prices have declined. Despite all factors pointing to a "buyer's market," buyers -- particularly on the lower end -- have not been motivated.

As rates have begun to dip, it will be interesting to see if there's a December awakening. Until next time!

The market in November continues to be below seasonal averages. While supply has caught up to norms, contracts signed continue to trail behind.

Activity across all stages of the transaction -- from open houses to closings -- are well below last year and seasonal averages. This is especially true in the the under-$2M market. which has been most sensitive to higher rates. Anecdotally, our team has seen the same thing. All of our active buyers since May have been looking around or above $2M, whereas we usually work with a wider range of budgets including first-time buyers on the lower-end.

As expected, closed sale prices continued to decline and we expect this trend to continue as deals reached this Fall will be reflected in closed sale data in the coming months. It is telling that median prices held almost steady while price per square foot declined substantially, indicating that the mix of activity has skewed to the higher end.

This month Brooklyn data closely mirrored Manhattan with overall metrics firmly showing that it is a "buyer's market" on both sides of the river. However, certain neighborhoods, particularly in NW Brooklyn, continue to buck trends and show resilience and strong demand, making up an outsize share of contracts signed relative to inventory.

Similar to Manhattan, median prices decreased less than price per square foot, indicating comparatively ore deals on the higher-end and in the more in-demand neighborhoods.

With interest rates falling, things might bounce back quickly in Brooklyn. According to a real estate attorney who does a large share of transactions and tracks this data, about 75% of deals he is seeing now involve financing compared to less than 40% in the Summer/early Fall.

Mortgage rates have steadily fallen (more than 0.5%) since the Fed did not raise rates at its November 1st meeting, the second consecutive meeting where they held rates steady following 11 straight rate hikes. Along with the October Jobs Report, which indicated that inflation might be under control, the market has reacted on the assumption that rate hikes are behind us and we can expect the Fed to even lower rates by next Summer.

If you come across a pricing history that doesn’t make sense, you may be seeing the ripple effect of a closing credit, a hush-hush discount that sellers give to buyers at the closing table that can throw comps off kilter. Brokers say more buyers are asking about credits and more sellers are agreeing to them in the current market to move deals along. (BRICK UNDERGROUND)

Following the plaintiff's victory in the Sitzer Burnett commission lawsuit, attorneys filed suit against REBNY targeting their policy that the brokers “shall each be paid an equal share of the commission as specified in the Exclusive Listing” which they claim has caused sellers to pay inflated broker commissions. (HOUSING WIRE).

Manhattan is a focal point of global real estate interest, and its dynamic market reflects various economic, social, and geopolitical factors. Given its relative importance, there are five critical areas to influence the Manhattan real estate market in the upcoming months. (FORBES)

Commercial leasing activity in November was underwhelming and and supply outpaced demand leading to an increase in available office space at the end of the month. (THE REAL DEAL)


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