January – 2023 Market Update

We, at the LevinKong Team, hope that you are staying well and keeping warm. Last January we were bombarded by snow, which didn’t stand a chance at keeping buyer activity at bay. Demand was uncharacteristically robust for the season. This January, we have yet to see a flake of snow, and while we as a team are incredibly busy, the market as a whole is still quite sluggish.

Demand in both our Manhattan and Brooklyn markets is down approximately 40% from this time last year. Higher interest rates and economic uncertainty are keeping many would-be buyers sidelined (although we have seen a recent uptick in mortgage applications). A lack of inventory and the resiliency of our city’s market has been holding values in line with our pre-pandemic numbers. There is currently only two-and-a-half months of inventory available in Brooklyn and less than five months in Manhattan. A market with under six months typically signals that we are in a sellers’ market (although we are not). We should start to see inventory numbers begin to tick up modestly, but we have no expectation that it will be in-line with a typical spring market. And based on what we are seeing on the ground, expect the lagging indicator of demand to show positive signs in the coming months as well.

Interestingly, closed data indicates that the average price/sq’ is up 1% in Manhattan and 4% in Brooklyn from this time last year. We believe that this a byproduct of the number of properties that have been pulled off the market and the disproportionate amount of turn-key renovated properties that are the targets of a limited buyer pool. From our boots-on-the-ground perspective, we believe property values are down approximately 7% in Manhattan and 4% in Brooklyn from their high water marks of late 2021 and early 2022.