NYC Real Estate in June 2024

6/23/2024

The demand is strong but still in a buyers market

New inventory is still not catching up with the demand. High mortgage rates are the reason for the low supply.
The market is also very fragmented. While there is a strong demand for particular price points and neighborhoods, there is stagnation in other sectors.
Overall markets 'price per square foot' is down 4.9% YoY in Manhattan and up 3.3% in Brooklyn.

There is significant fragmentation in 'new supply' and 'contracts signed' by the price point.
Manhattan market has significant contract increase YoY in the below $1m range and also luxury segment with $5m+ prices.
Brooklyn market has uptick in contracts in $1m-$1.99m price range.

Mortgage rates fell for the third straight week following signs of cooling inflation and market expectations of a future Fed rate cut.
While fed announced last December that there will be multiple rate cuts in 2024, we did not see them yet.
For consumers waiting for mortgage rates to fall much more and then buy, prices are likely to be rising across many markets over the next three or more years. Lower mortgage rates bring in more inventory but lower rates also bring in a lot more demand (pent-up).

Payrolls increased by 272,000 in May, led by strong hiring in health care, government, and leisure and hospitality.
There were 165,000 jobs added in April, slightly fewer than initially estimated.
Officials have said they plan to hold rates at a high level until there is further evidence that inflation is cooling.

Median rent in Manhattan for May reached its second highest in history.
Listing inventory and lease signings rose to their second highest level for May on record.
Doorman median rent increased YoY more than non-doorman for the fifth straight month.
Annual median rent for new developments outpaced existing rentals for the third time.