Real Estate in August 2024

8/19/2024

Contract activity has significantly increased in July.

In July 2024, sales in Manhattan significantly improved versus a year ago and were up 11% YoY. This was the 2nd noticeable improvement this year. Below are the most recent charts with August activity where Manhattan keeps up with contract signing.
Average days on market fell 11% year-over-year, as a greater share of apartments found buyers in under 60 days than a year ago.
As of August 2024, prices in Manhattan are 5.1% down YoY and in Brooklyn 10.1% up.

JPMorgan joins Citi in calling for back-to-back 50 bps cuts at both the September and November meeting.
According to multiple news reports, there might be ongoing rate cuts until the end of the year. **Rates tend to lower as the inflation is cooling down.

As of August 17th, 2024 the entire industry across the US has changed the way of structuring real estate commissions.
The main change is that now EVERY prospective BUYER will have to sign an agreement with the BUYER AGENT in order to be represented. And it has to be done BEFORE any home tour.
This new 'buyer agreements' will state a specific % that the buyer agent will be compensated as a result of closing the deal.
While the buyer can always embed this cost in the offer to the seller and negotiate, the formality of signing an agreement with the buyer representative and specifying the compensation % is now a mandatory procedure across the country. Here is to read more on this topic from WSJ.
Sellers would still be allowed to compensate the buyers in the agreement with Seller's agent (as it always has been). The only change is the wording in the document. It will be written as two separate commissions.
**WHY this new change happened: result of the NAR settlement on March 15th, 2024.
**WHAT has changes practically: rules buyers to sign more paperwork and facilitates transparency on how much their agent will be compensated.
**WILL sellers still be offering buyer agents %: all as usual. Commissions have always been negotiable and the motivation behind them is to increase the apartment exposure. According to new buyer agreements: buyers can opt out from seeing apartments where they will need to pay their agent out of pocket.

These new ways of conducting real estate business are NEW for the entire industry across the country.
Will this make home prices higher or lower? It is highly unlikely that the law will affect the prices in the near future. There are more challenges to deal with, such as mortgage rates and inventory.
Will it save you (as a buyer) funds if you decide not to use buyer agent? The answer to this question doesn't change with this new law in place. It has always been up to every buyer to decide. As someone who has been in the industry long enough, I would say it is hardly possible to measure savings where prices are negotiable.