November – 2023 Market Update

The LevinKong Team hopes you and your loved ones had a wonderful Thanksgiving weekend. The city is ramping up for the holiday season, and the streets are beginning to bustle with tourists and locals enjoying this magical season in the city.

November is typically the month when our real estate market begins to hibernate. After a relatively slow spring market, we saw more transactions in the summer and fall markets. Recent interest rate relief, although not where consumers would like to see it, led to a spike in mortgage applications and a recent uptick in activity. We expect that to be short-lived as the usual winter slowdown is almost upon us.

There are certainly fewer buyers in the market in general. However, we are observing more serious and seasoned buyers. They know what they want, and specific market segments are the beneficiaries. Renovated properties and listings in prime buildings and neighborhoods are reaping the rewards. Buyers are finding more significant discounts and vulnerabilities in the less attractive inventory.

For instance, the Williamsburg condo market is one of the city’s bright spots, as the average price-per-square-foot is up 3.5% year-over-year, and pending sales are up 45% over the same period. The Park Slope condo market has seen a price-per-square-foot increase of 7.5%, pending activity up 66%, and a supply drop of 18.5% from last year. Greenwich Village’s coop market has seen a 95% increase in contracts signed over the same period. The Financial District has been less fortunate. That condo market is down 13.8% per square foot, and pending is down 10.5%. The Upper East Side condo market average price is down 8.5%, and pending is down 7.5%. It is not a coherent market, and buyer preferences and market dynamics are increasingly segmented.

General uncertainty and higher interest rates are profoundly impacting the market. The average interest rate is now down 1% from their recent highs. While this is positive, The Mortgage Bankers Association predicts a  bigger downward rate trend in the second half of next year and 2025. Both buyers and sellers can take advantage of the current environment. Buyers can benefit from targeting vulnerable segments, and sellers in prime markets can take advantage of lower levels of competition. When rates decrease significantly, buyers and sellers will enter the market at a much higher clip. We don’t anticipate this will lead to a meaningful price appreciation in the short term, as the added inventory will most likely balance out a significant amount of the potential gain.

There are many ways to make this dynamic and intricate market work in your favor. 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.