2024 NYC Real Estate Market Predictions

The Weekly Recap

Mortgage rates fell for the sixth straight week, inflation is starting to look normal, job openings are at the lowest level since October 2021, Gold is the highest it’s ever been, Bitcoin continues its massive rally. Apple is looking to replace Goldman with Chase to be its credit card partner as the company’s market cap closes above $3T and its Taylor Swift’s world that we’re just living in as she’s named Time Magazine’s Person of the Year.

2024 NYC Real Estate Market Predictions

With the turn of the calendar comes resolutions and new goals for a successful upcoming year as well as hope that we can leave all the bad stuff behind us. Here are some of my NYC market and economic predictions for 2024:

Rates Will Drop- It’s not a question of ‘if’ but of ‘when’ and ‘how much’. The most bullish on rate drops have been investors and hedge fund honchos believing we will see precipitous drops in rates akin to how they rose. I am less confident in believing the Fed would do that and that rates will see a much more gradual and measured decline with 30-year fixed rate mortgages averaging 5.5% by the end of 2024.

Prices Will Rise As Rates Get Lowered- astonishingly, prices have not seen a decline as rates have risen as low inventory has kept prices flat or in some cases even elevated. As rates begin to trickle down, whether through Fed rate cuts or cooling inflation, the barrier to entry will be lowered for buyers to enter the marketplace, creating more competition in a low inventory environment.

New Development Sales Will Peak First Half of 2024- unlike homeowners looking for rates to get near equal where they purchased to sell, new developments will be a hot commodity and a beneficiary of the higher rate environment as buyers seek out move-in ready homes driven by low resale listing inventory and high renovation costs.

Sales Inventory Will Begin to Increase Q3 2024- At a certain point, homeowners will find an acceptable delta between where their purchase rate was and what the current rate will hold for them. Once we hit that point, you will see a flood of new inventory come onto the market. The average person lives in their apartment 5-7 years and as life events occur people have been putting off selling for fear of buying in a higher rate environment.

Rental Prices Will Decline Slightly- As mortgage rates decline, more renters will convert to first time home buyers alleviating the supply of renters in a crowded marketplace. Rising inventory will slow rent growth but limited rental inventory compared to pre-pandemic levels suggests that a massive drop in prices is unlikely but we should not see the market conditions we witnessed at the peak of Covid recovery.

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

NYC Market Update

Here is a view of new inventory that has come onto the NYC market over the past week as well as newly signed contracts in Manhattan. Expected slowdown headed out of a long holiday weekend.

Mortgage Rate Update

The 30-year fixed-rate mortgage averaged near 7 percent this week, down from nearly 7.80 percent just six weeks ago. When rates began to rapidly drop, purchase applications rebounded initially, but this improvement in demand diminished in the last week. Although these lower rates remain a welcome relief, it is clear they will have to further drop to more consistently reinvigorate demand.

News You Can Use

• Mortgage Rates in US Fall for Sixth Straight Week Bloomberg

• Inflations Is Starting to Look Normal Axios

• The Most Important Debate on Wall Street: Is Inflation Licked? Wall Street Journal

• Job Openings Slide Below Estimate to Lowest Level Since March 2021 CNBC

• Signs of a Weakening Job Market, in Five Charts Wall Street Journal

• Bond Market Euphoria Shifts to Debate Over How Low Fed Will Need to Go Bloomberg

• Apple’s Ideal Credit Partner to Replace Goldman Sachs is Chase Bloomberg

• Apple’s Market Cap Closes Above $3 Trillion CNBC

• Gold Rises to Record on Dovish Fed Remarks Yahoo Finance

• Rate Cut Hopes Drive S&P to Best Month of Year Axios

• Taylor Swift Named Time Magazine’s Person of the Year TIME

The Deep Insight

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