Winter – 2024 Market Update

We at the LevinKong Team hope you and your loved ones are well. The holiday season is in full swing, and the city streets are bustling with locals and tourists enjoying all that this magical time of year has to offer here in New York.

Our homes are essential to our family and holiday gatherings this time of year, and it is not lost on us how special these spaces are for making treasured memories. As we reflect on the year, we are so grateful to our clients for allowing us the privilege of helping them find new homes and appreciative of our past clients, advocates, and agent partners who put their trust in us.

This year’s fall season marked a significant shift with a palpable revitalization in our market. We experienced the most active fall market since 2021 before interest rates dramatically shot up, ending our post-COVID recovery. Sentiment indicators and market liquidity, measured by a rolling 30-day pace in contracts signed, and market pulse, the ratio of demand to supply, showed vast improvement. Contracts signed were up 36% over the same period in 2022.

In Manhattan, supply is down 14%, and demand is up 29.5% year-over-year. There are currently 7 months of inventory, an indication of a relatively balanced market between buyers and sellers. In Brooklyn, supply is down 2%, demand is up 20%, and leverage is well-positioned in the seller camp with only 3.5 months of supply. Again, much of this benefit hasn’t been equally realized across the market. Prime buildings and locations have experienced the lion’s share of this trend, and pricing is still crucial to success.

We expect substantial gains in the spring, as pent-up demand is increasingly moving back into action, and leverage should move more and more to the sell side. Inventory should remain relatively tight, with interest rates still too high to motivate many would-be-sellers to give up their historically low mortgages. Buyers are outgrowing apartments, and rental prices remain historically high. This dynamic will add pressure to inventory and should lead to upward price movement, although price often lags by several months. Competition will most likely grant long-needed relief for unrenovated and less prime inventory, as the better inventory will become increasingly contested.

This week, the Fed’s rate cut reduced the total by a point this year. The messaging was less optimistic than many hoped, and experts forecast only two 25-basis-point cuts in 2025. Expect week-to-week mortgage rate fluctuation but only modest cuts next year. New Yorkers are not known to be the most patient of people, and due to the nature of an inventory comprised chiefly of apartments, buyers have started to come to terms with these rates and their need for more space.

With the LevinKong Team, you can confidently navigate the complex and evolving real estate market. Our decades of experience and a data-driven, research-based approach are invaluable assets in this environment. We are committed to helping you achieve your goals, protect your investments, and address any questions or concerns you may have about the market or your decisions. Our steadfast dedication to your success reflects how much we value and care for our clients. We wish you a joyous and relaxing holiday season and a Happy New Year!