What are the latest trends with the NYC Real Estate Market?

Working in the real estate industry, this is a question that I often get when I meet with folks in my network. As of January 11, 2024, the NYC real estate market is showing signs of both stability and shifting trends. Read on for a breakdown:

Overall:

• Prices: Stabilizing for now, though slight increases still expected, especially in Manhattan due to limited inventory. Current inventory (including Private Exclusives & Coming Soons) is the lowest inventory in two years at 7,136 units. (Source: Compass January 8, 2024)

• Rentals: Rent increases likely to plateau, offering some relief for renters, but not significant drops. Winter is also a great time to score lower rent and potential concessions since most people don't want to move during this time. Renters might also benefit from falling mortgage rates, as more people leave the rental market to buy homes, that could translate into additional vacancies and higher negotiation power for renters. (WSJ)

• Inventory: Increased compared to pre-pandemic levels, creating more options for buyers, but still below peak levels.

• Buyer Demand: Moderate, with increasing interest from buyers due to stabilized prices and mortgage rates coming down.

• Seller Demand: Holding off due to uncertainty and higher mortgage rates, keeping some inventory on the market longer.

Specific Segments:

• Manhattan: Prices expected to rise slightly due to tight inventory, luxury segment remains strong. Price/Square foot: $1,356 - up 1.0% last month, down 7.3% from last year. (Source: Compass)

• Brooklyn: More price stability, diverse inventory attracting interest, but some pockets facing lower demand.

• Other Boroughs: Seeing increased interest and potential for growth due to lower prices and improving infrastructure.

Predictions:

• The market is expected to remain stable throughout 2024, with no major boom or bust.

• Mortgage rates could fluctuate, impacting both buyer and seller activity.

• New construction, especially luxury condos, might increase inventory gradually.

• Focus on sustainability and green energy features could potentially influence the market.

Overall, the NYC real estate market is in a state of cautious optimism. Investors, buyers, and sellers should closely monitor trends and stay informed about specific neighborhoods and segments before making decisions.

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