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January started with high hopes, and it ended on the same note with a palpable sense of anticipation. Though there has not been much relief on inventory constraints, buyers seem ready to dive into the market after 18 months on the sidelines. Empty open houses which had become the norm in 2023 are no more, with the number of open houses reporting no visitors down from 40-50% weekly to under 20%. After last week's Fed Meeting and Jobs Report, it seems that we won't be seeing rate cuts until June; however, this does not seem to have dampened the mood on the street. Check out our Manhattan and Brooklyn updates below, and please don't hesitate if you have any questions about this dynamic market. |
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| The signs of market activity are on the upswing. Open house activity is up (averaging 2.3 visitors in January compared to 1.2 visitors in Q4 where the range was 1.1-1.8). Signed contracts are up 11.2% from December and more than 20% year-over-year. Though new inventory was up from December, as one would expect this time of year, inventory levels were still not in line with what we'd expect in January. |
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While median closed price per square foot was down and listing discounts up, these are lagging indicators reflecting deals negotiated in Q4. Conversely, as we've been seeing, median closed sale prices were up yet again showing that the market activity was skewed away from the lower-end of the market which was most sensitive to high interest rates. |
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While it's still too early to call the Spring market, there is certainly an air of optimism with rate cuts on the horizon and buyers seeming motivated for the first time in many months. |
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| Brooklyn similarly had a seasonal uptick in new listings from December, but total inventory remains at an all-time low. Despite lower inventory, signed contracts were up double-digits year-over-year, a clear indicator of the level of demand in Brooklyn. |
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While limited inventory contributed to exceedingly low transaction volume in Q4 and in January, all closed sale price metrics saw increases, as buyers competed over fewer available homes. |
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Inventory will continue to be the main headline in Brooklyn for the foreseeable future. If some of the pent-up inventory finally enters the market, we expect almost immediate absorption, especially in the most in-demand neighborhoods. |
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There was much optimism going into 2024, with many expecting rate cuts to come as early as March. Unfortunately, last week's Fed meeting and strong Jobs Report dashed those hopes with rate cuts now not expected until June. As expected, the Fed kept rates steady, but the bigger news was Chairman Powell's remarks that rates would not be cut until there was stronger evidence that inflation had come down in a sustainable way to the 2% target. The Jobs Report a few dates later showed that the economy added nearly 3x the number of jobs and had higher wage growth then expected, casting further doubt on whether inflation was indeed under control and pushing back the consensus on the timing of rate cuts. |
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| Lowest Rate | January 1st |
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| | Highest Rate | January 25th |
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| | The S&P 500 set a record, rising 1.2% and surpassing the January 2022 high. The bet that rates will come down in 2024 has given the S&P 500 its latest push, taking its rise to about 35 percent from its October 2022 low. The NY Property Condition Disclosure Law will take effect March 20th, 2024. The law requires sellers to complete a disclosure about the property's condition and information concerning mold and flood insurance. Previously, sellers could opt that buyer gets a $500 credit at closing and the disclosure requirement was waived. The Real Estate Board of New York is implementing new rules relating to buyer’s agent commissions as the industry faces backlash nationwide. The provision prohibits listing brokers from paying buyer’s agents and will instead require sellers to pay them directly. The rule also requires listing agreements to clearly outline the seller’s offer of compensation to buyer’s agents. Manhattan rental prices finally stabilized last month. The borough’s median price was $4,050 in December, remaining unchanged year over year and increasing just 1.3% on a monthly basis—the first month-over-month rental increase since July. |
| | Interested in more real estate news? Check out Compass' |
| | | | | Low monthlies are always a draw, and even more so now with interest rates where they are. We have compiled our favorite listings across Manhattan and Brooklyn with exceptionally low monthlies. |
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Hear it from our clients! |
| “Isil has a deep & broad knowledge of the housing market in New York, and she and Isabel make a fabulous team. They're savvy, incredibly reliable and dedicated, and took care of all the ins and outs of our apartment sale: from the major aspects, like having and implementing an aesthetic vision for the space -- suggesting paint colors, rearranging our furniture, even staging it with contemporary decor of their own -- and marketing the heck out of it, to the minor coordination and scheduling details. We trust them both implicitly and always felt we were in great, professional hands.” -- Amanda & Jason, sellers of a two-bedroom Murray Hill co-op |
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Office: 212-913-9058 Compass is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions. |
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