It's halftime 2022...what have we learned? |
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It’s halftime 2022, the well-deserved break that everyone has been waiting for and, generally speaking, it feels like all the players (buyers and sellers) have gone into their locker rooms for a rest. The chaos of 2022 has everyone exhausted with all of the news (economic, political, geopolitical, tragedy…you name it) and has precipitated most to take a “time out” before they get back in. It’s “The Great Pause”, when people are revaluating their budgets and watching prices. The question is how long will this moment last, through the end of summer for sure and likely well into Fall.
We had been running at around 1,300 deals/month since the post-pandemic run started, with a peak in April of 2021at around 1,800 deals in that month alone. We saw 1,500 as recently as this past March. But since then, deal volume for the most recent 4 weeks has fallen below 1,000. This loss of momentum is causing negative sentiment; but remember, it’s relative. For nearly 18 months the market had been running hot; meaning that a drop back to a more normal (pre-covid) level feels bad, when in actuality it’s healthy.
Monthly Contract Activity
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Chart: Courtesy UrbanDigs
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This drastic reduction in deal volume is what has defined The Great Pause, brought on by a variety of factors, most notably, this time, by inflation and the rapid relative spike in interest rates. Both have been a shock to the system, not only the economic system, but to our own personal/mental coping mechanism for rationality. Oddly, rental prices, which are astronomically high, have served to actually buoy the sale market and sustain moderate demand. And it's these high rents that have investors actually re-entering the marketplace. The fact is, people want to buy; however, that bid/ask disconnect between buyer and seller has cooled deal volume.
While buyers are adjusting their offers to compensate for their reduction in purchasing power (see the eye-opening purchasing power analysis below), many sellers are holding on to yesterday’s prices. All the market reports right now are showing the record results from our recent peak earlier this year. However, those results are just that, the lagging results of deals negotiated in January, February and March of this year, before the war, before the highest inflation we have seen in 40 years and yes…before interest rates virtually doubled. These numbers do not represent where we are today. Consequently, sellers need to adjust to the new reality to get it done.
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"Purchasing Power"
The 2% difference we have
experienced in the last 90 days
Interest Rates:
Example below reflects the difference in purchasing power between:
3% vs. 5%
$1M borrowed at 3% = $4,216/month
$1M borrowed at 5% = $5,368/month
That is a difference of $1,152/month or $13,824/year.
Alternatively, we could look at it this way:
At 3%, $4,216/month will afford you a $1,000,000 mortgage.
At 5%, $4,216/month only affords you a $785,500 mortgage.
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So what’s ahead? Well, although lower deal volume had begun to result in increased inventory, the seasonal summer-slowdown and the “pause” have been greater counter-forces, contracting overall-inventory at the moment. With many buyers on the sidelines, the serious buyers are actually encountering a bit less competition. Their fortunes could improve even more when Fall comes and a flood of new property could come on the market; many sellers have been holding their properties back until after summer. With sentiment still sticky for most, this Fall could present an incredible buying opportunity, as the higher level of inventory will likely outweigh the demand. By mid-Winter/Spring though, sentiment will have improved and the new normal of high interest rates and new, more favorable, pricing will have settled in. New buyers will be entering the marketplace in large numbers and it has the makings, once again, of an extraordinarily busy and uber-competitive first half of 2023.
So much more to discuss, but no time. Please contact me to discuss anything and everything…inflation and interest rate expectations, inventory, pricing, timing, the rental market, preparedness etc.
As you know, I always say two things: 1) Anyone interested in buying or selling, should be rolling up their sleeves to determine whether the time is right to sell or if there's a home/investment property out there for them; and 2) Who represents you matters…your best investment is often in the broker you choose; find someone with experience, who you feel you can trust.
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* M A N H A T T A N - M A R K E T N E W S *
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* H A M P T O N S - M A R K E T N E W S *
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There's still opportunity to snag a great place for August and September. Take advantage and get the break you need.
Deal volume is low because there are fewer properties to sell, but prices seem to be holding steady. Very simply, it is the supply and demand principle at work. The economic pressures of inflation and interest rates are placing downward pressure on prices; but simultaneously the demand for fewer properties is equaling the former and has us moving flat. There are still desirable homes out there which are fairly priced, so if you see something you like, you should buy it!
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As a buyer, you need to know how to identify the right opportunity for you and when it makes sense to jump in...or not. Everyone's circumstances are unique. Like Manhattan, one needs good representation to successfully maneuver the nuances that exist in this unique marketplace. Let me know if you need help.
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A weekly podcast on real estate in the tri-state area.
Thursday's from 4-5pm (on hiatus for summer)
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* MORTGAGE & INTEREST RATES * |
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Courtesy: Wells Fargo as of 7/11/2022 @ 11:46am EST |
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Chart Courtesy: Wells Fargo |
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* Most Recent MARKET REPORTS * |
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The Latest Market Reports - Sales:
Second-Half 2021 Brooklyn Townhouse Report: click here
Other Markets:
Hamptons' & North Fork 1rst Quarter (2022): click here
Hoboken/Jersey City 1rst Quarter (2022): click here
Interactive Rent vs. Buy Calculator:
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These are great local resources, especially at times like these. Here are some of the best and most comprehensive neighborhood blogs that are helping to keep us informed. Click on each. |
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With Patch you can choose New York City; however, they also have more concentrated areas categorized as follows: Central Park, Upper West Side, Upper East Side, Midtown-Hell's Kitchen, Harlem, Astoria-Long Island City, Chelsea, Gramercy-Murray Hill, West Village and East Village.
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Summer evenings at
The Iris and B. Gerald Cantor Roof Garden
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Enjoy cocktails and snacks with a stunning view of Central Park, and magical sunsets on Friday and Saturday evenings. The Roof Garden may close on short notice due to bad weather. No reservations required. Space is limited; first come, first served.
Hours: Sunday–Tuesday and Thursday: 11 am–4:15 pm; Friday and Saturday: 11 am–4 pm and 5–8:30 pm (Last call at 8:15 pm); Closed Wednesday
Location: Fifth Floor - Use the First Floor elevator in European Sculpture and Decorative Arts
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How do you get the most out of the world's most famous skyline? Well, you enjoy it with a side of cocktails, bites and spritzer at a NYC rooftop bar. Elevated hours is always a good idea, and summer 2022 we deserve it more than ever.
Here you'll find the best NYC rooftop bars, with all info you need about each venue. Opening hours, dress code, pictures, maps and much more. New York City is arguably one of the best cities in the world when it comes to rooftop bars and terraces. You can find luxurious, relaxed, nightlife, fancy and cozy rooftop bars in every part of the city. From Brooklyn to Midtown Manhattan.
Stay fresh in a NYC rooftop pool or go for a weekend NYC rooftop brunch, all with one of the most iconic skyline views you can find. But which is the best rooftop bar in New York? Just scroll down and find the NYC rooftop bar best suited for you.
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The Hottest Restaurants
Open Right Now
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A variety of pastries from Lysée. | Dan Ahn/Lysée |
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Eater's Heat Map (click below) - Some of the Hottest Restaurants open right now:
Eater editors get asked one question more than any other: Where should I eat right now? Here, we’ve put together a map of the latest Manhattan debuts drawing NYC’s dining obsessives.
New to the list in July:Lysée (a whimsical ode to pastry from chef Eunji Lee), and Little Myanmar (a Burmese newcomer in the East Village).
Health experts consider dining out to be a high-risk activity for the unvaccinated; it may pose a risk for the vaccinated, especially in areas with substantial COVID transmission.
For more New York dining recommendations, check out the new hotspots in Brooklyn and Queens.
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Is Chocolate Good for You? |
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Studies suggest that cocoa might benefit health, but it’s unclear how that may translate to a typical bar of chocolate.
"Taste surely plays a role in chocolate’s popularity, but you may have also heard that this delectable treat is good for your health. How does this perception stack up against the science?" Read more.
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The legendary chef Jacques Pépin said: “You should have fun in the kitchen and then emerge from it with flavorful, wholesome, attractive dishes that can be served to both family and guests.”
I can't think of a better philosophy to describe the book Rob wrote. So if you're looking for an inexpensive, but highly useful Father's Day gift for any of the men in your life, you can find it here.
The Food Humorist©, is a Manhattan born man-about- town who writes, produces and hosts programs about food. I highly recommend his new book for Dads like myself. There is a new kind of dad, and he's doing far more domestic duty than at any time in history, including cooking. Although it's written with a sense of humor, this book is a serious resource for dads and anyone else interested in upping their game to make great tasting foo d bat home, even if they have never used a chef's knife or a roasting pan before.
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Rob is also on iHeart Radio & SPOTIFY with his ALL YOU CAN EAT podcast about delicious food, cooking and luxury travel.
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PRIVATE ONLINE COOKING CLASSES:
Ask Rob about his privates…by which he means that he offers customized cooking lessons to individuals and to groups. You learn, you laugh, and you eat well.
Now that ALL of us need to pitch in when it comes to feeding the family, I suggest picking up some serious tips from Rob. As he says, he went to cooking school so you don't have to. These sessions are fun and literally provide prized skills for upping your game. Enjoy. See Rob's intro here.
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Prepare Your Property for Market with BHS's new program |
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Curate provides you with the ability to prepare your home for sale
with no up-front costs,100% payable at closing.
Services include Cleaning/Decluttering, Renovation, Staging & Design
and more. Contact me and/or click here to learn more.
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New York City * The Hamptons * Palm Beach
Connecticut * Miami
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With Partnering Worldwide, Brown Harris Stevens continues to leverage its very productive relationships with top brokerages nationally and internationally by inviting partners to high- light key properties in their respective markets on BrownHarrisStevens.com, and to feature our important properties on their sites. Learn more.
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With Partnering Worldwide, Brown Harris Stevens continues to leverage its very productive relationships with top brokerages nationally and internationally by inviting partners to high- light key properties in their respective markets on BrownHarrisStevens.com, and to feature our important properties on their sites. Learn more. |
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- Recognized by New York Magazine & Five Star Professional as one of the "most accomplished real estate professionals in New York City."
- Ranked nationally by REAL Trends as one of "America's Best Real Estate Agents" for avg. sales price of $4.350M.
- Recognized member of the 2016 "TOWN Elite" class
- Sold a single family Townhouse faster than any other on the Upper West Side over $10M to date. (StreetEasy)
- Certified Negotiation Expert (CNE)
- Trivia: Won the 2015 New York Times NCAA Basketball Pool.
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Roberto Cabrera
Licensed Associate Real Estate Broker
New York City * The Hamptons * Palm Beach * Miami
rcabrera@bhsusa.com
o: 212-906-0554
m: 917-701-3907
Clubhouse: @cabrera_roberto
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Brown Harris Stevens
1926 Broadway
New York, NY 10023
(917) 701 3907
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Disclaimer: The opinions and content in this newsletter are assembled solely by Roberto Cabrera for informational purposes only and does not constitute financial, tax, investment or legal advice. Everyone has unique circumstances and should consult the their own respective professionals.
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