July – 2023 Market Update

We, at the LevinKong Team, hope that you are safe, well, and enjoying your summer thus far. While this time of year is typically a slower season for NYC real estate, this July proved to be more active than normal. In Manhattan, late June to mid-July was the most active period of the year so far. In Brooklyn, peak activity also occurred in July. In contrast, for 2022, the high point of the market materialized in May, and June of 2021. Those are more in line with typical NYC market seasonality. We do anticipate that August will return to its typical lull, however, as we are already seeing the trend begin.

Low inventory levels are still presenting challenges to active buyers. In Manhattan, inventory dropped 8.3% from the prior month and is down 7.2% from this time last year. Pending activity is up a surprising 7.5% from June. In our Brooklyn market, supply is down 5.8% month-over-month and 13.7% year-over-year, and pending activity jumped 10.2% in July. The market pulse (pending-to-active ratio) increased by 17.5% from the previous month in Manhattan and 17.2% in Brooklyn. In Brooklyn, where there is less than three months’ worth of inventory, this dynamic is making things very competitive. 23% of listings have traded above their asking prices. However, in Manhattan, it’s still quite bifurcated, as unique properties, those in prime locations, and those with newer renovations are outcompeting their less attractive counterparts.

So much of what we are experiencing is tied to higher interest rates. It’s keeping many would-be buyers sidelined, at the same time constraining inventory. Many homeowners that would be looking to make trades are staying put to maintain their historically low interest rates. Economic uncertainty has been a major influence as well, but some recent tailwind is most likely the reason we saw our recent spike in activity. A majority of economists and mortgage experts are predicting a lowering of rates later this year that will continue throughout 2024. This should lead to both more demand and an uptick in supply.

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. Enjoy the rest of your summer and please let us know if we can answer any questions you may have about the market, or how best to navigate complicated decisions.