October 2022 Market Update

The LevinKong Team hopes that you are safe, well, and enjoying this crisp and comfortable fall weather. For many New Yorkers, this is our favorite season in the city. We would also like to take this opportunity to send our thoughts and support to our friends, clients, family, and colleagues in Florida during this difficult time.

Here in NYC, our fall market is seeing a relatively slow uptick in inventory. At the same time, demand has fallen from 2021’s frenzied pace. While it seems like a sluggish market compared to last year, we are still above 2019 and 2020’s sales pace. This cooling down has led to a regression into more of a normal market, historically speaking. That being said, with Manhattan’s demand down 14%, the market pulse (pending-to-active ratio) is now below .4 which has us in the higher portion of buyers’ market territory. In Brooklyn, the market pulse of .65 is indicative of a more neutral or balanced market. The weekly numbers would forecast an increase in contracts signed in October in both markets.

Manhattan’s supply is down a marginal amount from this time last year (also a low inventory market), but Brooklyn’s inventory levels are down more significantly at 19% over the same time. Many believe that Brooklyn’s constrained inventory and rising demand are pointing at a potential bottom currently, with buyer leverage perhaps at its peak. In Manhattan, buyers in new development and the luxury segment are the most poised to take advantage of the shifting market conditions. Investors are also in a very advantageous position, as our rental market remains incredibly strong.

Higher interest rates and economic uncertainty are giving pause to many would-be buyers. Our current interest rate environment is a direct result of Fed actions and the federal funds rate. Economic experts are generally signaling that the expectation is for the curve of the federal funds rate to hike until April of 2023. This prediction is baked into current interest rates. If this holds true, we should see rates start to go down next spring; that makes this an incredible buying opportunity. While many wait for rates to drop, savvy consumers are taking advantage of current market conditions. With our assistance, our buyer clients are negotiating seller rate buydowns. This is only one strategy (albeit, a very favorable one) for mitigating higher monthly payments, while capitalizing on less competition.

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 let us know if we can answer any questions you may have about the market, or how best to navigate complicated decisions.