After a very slow Summer when prospective buyers were seemingly "gone fishing" for anything but apartments, a looming question is what to expect this Fall and beyond.  Based on current data and analyses by real estate experts, coupled with what we are seeing on the ground, we anticipate low transaction volume through the end of the year and into early 2023, but we don't expect prices to drop off a cliff. As we are already seeing from September's figures (with new listings down 12% year-over-year), sellers who don't have to sell immediately will likely wait out the current interest rate environment, which is currently expected to stabilize and improve next year after peaking in early to mid-2023. 

Particularly with the robust rental market, many sellers who are able will choose to hold rather than settle for lower prices, especially given the recovery of buyer demand (tied to interest rates) is on the 12-24 month horizon.  Lower inventory should exert upward pressure on prices even in the face of lower demand, keeping prices relatively steady after the modest correction we've already seen.  Data from September support this: even with contract activity down dramatically (-33.7% year-over-year), prices largely held steady with median sale prices and price per square foot essentially the same month-over-month and even up slightly year-over-year.

Of course, not all sellers are able to hold their properties, so buyers can take advantage of discounts and negotiability, particularly on certain product types.  Some buyers will also shrug off currently high mortgage rates with the expectation they will be able to refinance at a lower rate relatively soon.  Anecdotally, we are seeing more cash buyers than usual, even on entry-level coops which historically sell with financing.  

While the buyer pool is markedly smaller than a year ago, we have seen an uptick in activity across our listings since Labor Day, in terms of both appointment requests and offers received, with some listings even receiving multiple offers. So, at least some buyers are back from the Summer slump.  

Assuming no unexpected shifts in macroeconomic trends or October's market data, the sky is far from falling, though it may be a slower next 6-12 months for us agents in Manhattan. 

According to a recent report, homes most vulnerable to price declines in a potential economic downturn are found in the suburbs of New York City (most in NJ), Chicago

 metropolitan area, and throughout California.

September homebuying activity in NYC and its suburbs

 were down 20 - 30% across the board last month compared to a year ago but still above normal levels.

The real-estate sector is still adjusting to rising mortgage rates, recession fears, and a strong job market, which in NYC has led to

highly unpredictable results; 

(WALL STREET JOURNAL)