April – 2023 Market Update

The LevinKong Team hopes that you enjoyed the holiday weekend and the start of spring. In New York City, we welcome the warm weather, al fresco dining, and rooftop gatherings that we eagerly await all winter long. As the first quarter wrapped up, NYC’s housing market began showing signs of a resurgence, but that activity hasn’t been equally distributed through all market segments.

Some confusion abounds as certain properties are seemingly flying off the shelf, while others are sitting. The overall economic uncertainty, conflicting messaging, and higher interest rates are making some would-be buyers and sellers contemplate their actions longer than normal. Inflation is slowing, expectations of lower interest rates in the not-so-distant future, an inverted yield curve, credit spreads tightening, a rebound in the equity markets, low unemployment, and continued chatter of a recession (shallow or deep) are not all in an alignment that would point to a clear path forward. However, even with all the muddled messaging, NYC’s real estate market is marching on. “With builder confidence and consumer sentiment rising and unemployment relatively low, it seems that NYC is holding steady- and should continue to do so,” according to U.S. News & World Report.

Manhattan is seeing a steadily growing supply, but still not at levels that we are accustomed to in our typically high spring season. Pending activity is up 15% month-over-month, but down 35% from this time last year. We had been down close to 60% year-over-year just a couple of months ago, so the trend is positive. In general, it is a neutral market, not favoring buyers or sellers particularly. This is occuring after several months that favored buyers. However, downtown is performing better than uptown and renovated properties are the preferred target. There is price sensitivity in the buyer pool, and well-priced property is being rewarded.

In Brooklyn, supply is up a meager 4.2% from last month and down more than 10% from this time last year (which was a low inventory environment). Pending activity is up 14% month-over-month, down 33% from last year, significantly impacted by the dearth of available inventory. It’s currently a steadier and less volatile market than Manhattan, and activity is less segment specific as well. Brooklyn really never shifted to a buyers market, even after the abrupt interest rate spike. Again, a lack of sellers is the driving force. Both Manhattan and Brooklyn’s rental markets are showing little sign of a slowdown and investors and landlords are reaping the benefits.

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.