Hi LivNY!
Hope everyone enjoyed their Memorial Day holiday weekend.
As we approach the unofficial start of summer, it's evident that the NYC residential real estate market is buzzing with activity. Manhattan is witnessing record-breaking median rents and luxury properties reaching their highest prices in 12 months, despite concerns about inflation and recession. Cash sales and exorbitant rental rates dominate a market influenced by inflation and interest rates.
Sales Market –
Taking a closer look at the market, both new listings and new contracts have been increasing month over month this year. This trend is likely to continue as we approach summer. Additionally, an interesting trend is emerging—buyers are opting to pay in cash more frequently than ever before. Around 60% of first-quarter purchases were completed without financing which signals that buyers consider real estate a safe investment amidst high interest rates and inflation.
Rental Market –
In March, the median monthly rent in Manhattan reached a record high of $4,175—a nearly 13% increase compared to the previous year. This price surge is likely correlated with higher mortgage rates, which have doubled since last year. Consequently, some potential buyers have chosen to withdraw from the housing market. Despite a year-over-year increase in rental inventory in March, the number still remained 10% below the long-term average. Therefore, rental prices are unlikely to decline as we enter the peak season.
In this economic climate, sellers should be mindful of the current market conditions and price their listings accordingly if they wish to sell within a reasonable time frame. Buyers should assess the available inventory and be prepared to negotiate, particularly for listings that have been on the market for an extended period. Ultimately, working with homes priced according to the market's demands is likely to yield favorable outcomes for all parties involved.
