{November 2021} Lower Inventory Causing Price Increases
We are going to get our Christmas tree tomorrow. I didn’t grow up with the tree-decorating tradition, but it is certainly a beloved family activity now! Every year we get a new ornament that reminds us of the year that went by. With the holiday spirit in full swing, I would like to take a moment to thank you for reading for the past year and wish you a very good holiday!
The most notable impression I have from November is that bidding wars are more common. Up till now, our market has indeed been very busy, with a lot of listings going into contract every month. But price increase has been slow-going. But lately, my fellow agents and I notice that inventory starts to feel tight. When buyers want to go out, there aren’t as many places to see. And more and more often, we start to see listings get multiple offers. For the first time in 4 years, total inventory level dips below the long term equilibrium of 7 months, to 6.3 months. Last time it was this low, it was January 2018. It is possible that seasonality plays into the lower inventory number with some sellers pulling listings off market for the holidays. We shall see if this lower inventory persists into the new year.
Good Read
This is the time of the year for… tips for your building staff! Read here for a broad guidance on how much to give.
The big momentum we saw in January slowed down in March, as the expectation of rate cuts dimmed. It was as if the subset of buyers who were rushing to take advantage of the window where prices were still low and rates were still high, had done what they needed to do and the market slowly came back to the slower pace of 2023.
February was a little busier than January, which was busier than all of 2023. It felt that spring was in the air after a long winter for the New York real estate market.
2024 started with a busy tone for the New York City real estate market. For all of 2023, we said to our buyers that “you marry the price but not the rate”, meaning now was a good time to buy because it’s a buyer’s market and prices were negotiable.
The real estate market in NYC saw about 15% more transactions in December 2023 than a year ago in December 2022. Is it a telltale sign that the real estate prices will recover in 2024? Prices haven’t moved but more buyers have come off the sidelines and jumped into the market to start the search.
Rates came down from their highs. Wall Street debated how soon and how much the Fed would cut rates next year.
Compared to last May, before rates started to rise (does anyone still remember those days?!) prices were now down about 11%. Transaction volumes were down 40%. Inventory was up almost 60%.
The NYC real estate market is at an interesting crossroad. On the one hand, we feel a lot of pent-up demand from buyers who have been watching and waiting for rates to go down.