NYC Real Estate in April 2023

Spring 2023: active sales market  

• Great news for Manhattan sales market: it sees both buyers and sellers. April inventory increased 8.8% in comparison to March number and keeps going up as a healthy spring indicator. 
• Buyers signed 14.7% more contracts in comparison to March 2023. This number is though 30.1% lower than last year, which is expected. 
• We treat 2021 and 2022(Q1) as 'correction years' that made up for all the low pandemic activity. Number of deals in that period was ultra high so comparing this year to last year is not making sense. 

​Sales prices are slightly down

• Sales prices are 3.5% down on average comparing to April 2022. The reason is higher mortgage rates.
• Price fluctuations also depend on the neighborhood/building you are purchasing in. Some neighborhoods can be more down in prices than the others. 

​Rental market finds its new highs

• Median rents in Manhattan and Brooklyn reached new highs in April 2023. 
• New development rental new lease signings rose at triple the annual rate as existing rental lease signings as of March 2023.
• Luxury median rent rose annually for the twenty-first consecutive month.
• More than half of all luxury tenants signed two-year leases for the third straight month.
• Luxury listing inventory has been rising annually since last summer but remains well below the decade average.

Mortgage rates are volatile and went back up

• Following five consecutive weeks of declines, interest rates jumped back up on April 20th. 30-year fixed rate is 6.39% now. 
• As inflation starts to come down, mortgage rates will recede somewhat as well. If we experience a recession, rates may drop a little faster. But average 30-year fixed rates will likely remain somewhere in the 6% to 7% range throughout 2023.
• It always helps to use mortgage calculator to understand home financing process, amortization, and also learn on what helps to obtain a lower interest rate. 

​New York leads among the world’s wealthiest cities 

• The Big Apple held its top spot after the number of high-net-worth individuals surged 40% in the 2012–2022 period, according to Bloomberg.
• The annual survey looked at 97 cities in nine regions around the world. New York was followed by Tokyo, California’s Bay Area, London and Singapore.

​Commercial to residential conversion = inventory

• As office vacancies in NYC has jumped 18% after pandemic, Mayor Eric Adams announced his push to convert a big chunk of the underused office space into new apartments for New Yorkers.
• 25 Water Street, used to be the office of Daily News and JPMorgan Chase, is set to create 1,300 apartments, the most extensive conversion to date.
• The McGraw-Hill building, a landmark office tower in Midtown Manhattan, is set to undergo a partial residential conversion that will turn its top two-thirds into 224 luxury apartments.
• Conversions might take around 2 years but repurposing the buildings is a great way to solve the shortage problem. 

​Takeaways

• SELLERS: price according to your active competition, with less references to recent 'sold' category as the market has been changing from 2021-2022 period. If you've been on the market for 45+ days, it is better to revisit the price because the demand is active. 
• BUYERS: if you are thinking of purchasing but not sure if you should do it now or wait until rates/economy improve, keep in mind that you can always refinance later. If rates go down, most likely prices go up or inventory might not be there. If you are willing to do some renovation, you may also negotiate a good deal in this market. 
• RENTERS: with rising rents and long term commitments to the city, it is always helpful to explore 'buy-rent' calculators and learn about all the available financing  options. 

​Please reach out with any questions, comments or if you are planning to sell, purchase, or rent your place in NYC. I will be glad to help.

About the author:

Alena Sakovich
Licensed Real Estate Agent
Certified Negotiation Expert
R New York
Mobile: 917.930.9925
Email: [email protected]
@alena_vs

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