“Hmm,” I imagine you’re probably muttering: “I must have missed that Agatha Christie whodunnit.” Unfortunately, this little mystery is the story of New York’s shrinking real estate inventory - and the steep decline in apartment listings compared with last year. Before I discuss what’s behind it all, consider the numbers. From April 28th to October 28th, 2021 there were 47,960 new co-op and condo listings. During the same period this year, the number shrunk to 38,392 listings. So, where have all the apartments gone?

Let’s start with rising mortgage rates.

Just when we thought mortgage rates wouldn’t get higher, they’re now tipping the scale at 7% - a 20-year high! The lofty cost of borrowing money is keeping many would-be buyers on the sidelines. They’re waiting for mortgage rates to go down. And they’re feeling the pesky pinch of inflation and a wild investment market. In light of these conditions, more and more sellers are pulling back from entering the market. They’re waiting for a stabler real estate climate. Here’s what I’m telling sellers: with today’s reduced apartment inventory, a prime listing in a prime neighborhood will definitely attract interest. But with so many buyers still on “pause” mode, you’ve got to be realistic about pricing. 

My game-plan for buyers is also shaped by market realities: don’t lock yourself into a 30-year fixed mortgage. Instead, opt for 7 or 10 year loans with lower, adjustable rates. When mortgage rates finally start dropping, you’ll have the flexibility of refinancing at a better rate.

There’s inventory with new construction, but…

We’re also seeing the impact of today’s economics on new-build development. The cost of building materials has soared. Developers are having a harder time securing financing from local and international institutions. The fact that fewer folks are moving from their current apartments into shiny new homes also chips away at inventory numbers. The bright side: I have a proven track record at negotiating generous concessions from new-build sponsors, ranging from zero common charges for a year to the covering of all closing costs. 

Sure, you’d love to live on a leafy cobblestone street in the West Village. But apartment prices can be as off-the-charts as the $65 branzino at Via Carota on Grove Street. Chelsea is an unbeatable and more affordable alternative, with stunning brownstone-lined blocks, acclaimed galleries and fantastic restaurants.

Park Slope is another dream neighborhood, with manicured streets and its warm community feel. But prices there are way up. Here’s a terrific Brooklyn detour: Prospect Heights. You’re steps away from the Brooklyn Museum, Botanic Garden and global-inspired dining. The deals are definitely better in this nabe known for its brownstone-renovating pioneers. 

Broaden your horizons to expand your purchasing power. Think Greenpoint instead of Williamsburg. Midtown West instead of Upper East Side. South Street Seaport instead of Tribeca. They’re all superb alternatives, offering better value in tricky times.

Let’s continue the conversation.