March 9, 2022
March Market Update
We, at The LevinKong Team, hope that this finds you well. While this is a real estate market update, we feel it necessary to express that our thoughts are with the people of Ukraine, and we are hopeful for a peaceful resolution to this humanitarian crisis. The implications of recent world events have been felt across the equity, bond, and real estate markets.
Stock market volatility and lower interest rates are showing early signs of pushing many off the fence into the market. Mortgage rates have decreased after US Treasury yields receded based on these recent events. Rates are expected to stay low in the short-term but are likely to continue their previous upward climb in the coming months. NYC real estate is a historically safe investment that often benefits from uncertainty elsewhere. While supply ticked up slightly in Manhattan, it was still down 25.5% from this time last year. Pending contracts pushed up 3.5% month-over-month and 13% year-over-year. In general, we are still in an inventory constrained market and listings that aren’t moving are most likely having their price rejected by the market. We are also observing and participating in more off-market transactions than a typical market would encounter.
Our luxury market is continuing to lead the charge. From February 2021 to February 2022, the median price per square foot increased 17% across the city. This is skewed higher, however, from the volume of trades occurring in the high-end of the market. The $1-2 million segment saw price per square foot gains of 7.5% and the $2-5 million segment experienced 11% gains over the same period.
The Brooklyn market remains incredibly heated with pending sales up 17% month-over-month and 27% year-over-year. Supply recently pushed slightly higher, but remains lower than this time last year (which was already starved for inventory). As 269 new listings hit the market last week, 210 went into contract. There is currently less than two months worth of supply in Brooklyn and even less in some of the most prime locations. Median price is up approximately 8% year-over-year and we remain bullish on this trend continuing.
With proper guidance, there are many ways to take advantage of this dynamic and intricate market. More than ever, a data-driven, research-based approach, rooted in decades of experience, will equip our clients to thrive in this environment. Please stay safe and let us know if we can answer any questions you may have about the market, or how best to navigate complicated decisions.
