January – 2024 Market Update

We at the LevinKong Team hope you are staying well and keeping warm. We have been experiencing some frigid temperatures in the city, but snow lovers are left in the cold for the second consecutive year. Demand was uncharacteristically robust last month, which has, to a lesser degree, continued into this month.

Demand in January was up over 40% year-over-year in both our Manhattan and Brooklyn markets. At the same time, supply has further slipped, down 3.5% in Manhattan and 5.8% in Brooklyn. Good inventory is swooped up quickly, and undesirable property is sitting on the market or being pulled off more than most past markets.

2023 saw our median sales price hit a record of $1.1 million, while transaction volume was down 14%, according to StreetEasy economist Kenny Lee. Higher interest rates kept many buyers and would-be-buyers sidelined. Most transactions involved no financing, and the properties of choice were renovated and in prime market segments. This confluence was why price-per-square-foot and median sales price numbers look so good.

The Fed is set to announce its rate policy this week. So much hinges on this decision. While it had appeared to be a foregone conclusion that rate cuts would be announced, the probability of a rate cut in March has lowered to 40%. The economy is outperforming most expectations; the economy is growing, inflation is near target, consumer spending is humming along, and the unemployment rate is at a near half-century low. Interest rate cuts are still expected this year, which will inevitably add inventory to an inventory-starved market and push buyers back into the fold. There are many ways that both buyers and sellers can benefit from the current conditions before this change.

With proper guidance, many ways exist 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.