December Market Update

We, at the LevinKong Team, hope that you and your loved ones are well. The holiday season is in full swing, and the city streets are once again bustling with both locals and tourists enjoying all that this magical time has to offer here in New York.

Also bustling, is our NYC real estate market. Although new listings are dwindling due to normal seasonal slowdowns, the same is not true for buyer demand. In Manhattan, supply levels are down 34% year-over-year and 11% from the prior month. At the same time, demand has remained relatively strong, and we have seen over 200 signed contracts each of the last two weeks. The ratio of pending (contract signed) listings to active listings, what we call the market pulse, is up 150% year-over-year and up 14% from last month. Price-per-square-foot, on average, is up 9% from this time last year. We are now up from the pre-pandemic level. Manhattan’s market is currently in a similar position to that of 2018, but still not back to the levels of the 2015 and 2016 markets.

The market for luxury properties is especially strong. We have been seeing the highest level of luxury sales volume since that market segment’s peak in 2015. Pending luxury sales are up an incredible 188% year-over-year, while supply is down 22% over that same period. New development sales have ticked up significantly as well. While average price-per-square-foot for luxury homes is up 4.5% year-over-year, there is still tremendous value which is attracting buyers from around the country, and around the world.

The Brooklyn market has stayed its course, defined by high demand and low inventory. In this market, supply is down 24% from this time last year and down 11% from last month. At the same time, demand is up 32% year-over-year and up 2% from last month, when the seasonal slowdown would typically dictate otherwise. We are experiencing a very competitive rental market as well. There isn’t enough inventory for all the renters that returned to the city, along with those moving here for the first time. Many investors are eyeing Brooklyn condos that either have tax abatements or low monthly costs because the current dynamic is an advantageous one.

While interest rates are still at historically low levels, the Fed’s announcement that they would pull back on their asset purchasing (including mortgage backed securities), has most experts expecting a gradual rate hike in 2022. This uptick is predicted to be a slow climb since it has been expected. Buyers looking to finance real estate purchases may want to push up their timeline in order to take advantage of the current rate environment. This, along with the supply and demand dynamics, should lead to a very active start to our 2022 real estate market.

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. Have a very happy, healthy, and abundant holiday season!