The Four Types of Real Estate Markets

The Weekly Recap

The US Economy went gang busters in Q3 growing 5%, JP Morgan’s Jamie Dimon calls out the central banks for being completely wrong on economic forecasts, big banks had a strong Q3, more people are becoming delinquent on their car and credit card payments and the Bank of England is likely to follow the US’s lead on holding rates steady. The House of Representatives finally has a new speaker, Morgan Stanley has a new CEO, Taylor Swift is now a Billionaire, and Gramercy Park apparently makes NYC the worlds most ‘interesting’ city.

The Four Types of Real Estate Markets

Whether you realize it or not, we actually live in an environment that consists of four separate real estate markets which our friends in the news media consolidate into one. Much like clients, no two markets are the exact same although they may be looking for the same thing at the same time. Thats why it’s important to realize that not everything we are told directly correlates to our own reality. The four types of markets are National, Local, Neighborhood and Building

National: This market is where all the scary headlines derive because all national data is aggregated that creates a narrative that real estate is terrible everywhere when in reality what happens in Phoenix, Boise or Austin has zero impact on what occurs here in NYC.

Local: This is the NYC market, the local NYC market is outperforming the overall national real estate market. The more granular you are able to get into your market, the more you’ll see that NYC continues to thrive due to its track record of appreciation, it being a safe haven of capital and a flight to quality for international investors.

Neighborhood: Within NYC, there are certain neighborhoods that if the entire island of Manhattan was on fire, would still yield high demand. Areas like the West Village and TriBeCa outperform both the NYC and National real estate markets.

Building: This may seem like a strange one but this is the most important real estate market of all. 130 William in the Financial District is one of the best selling new development projects in all of lower manhattan. The building is outperforming the neighborhood that it sits in, is on par with the overall NYC market and is outperforming the national market. So although rates may be high and buyers on the sidelines, there is less room for negotiability here.

The importance of understanding the different levels of real estate markets is to realize the information you’re seeing in the news actually means. No two markets are created equal or are impacted the same by overall conditions.

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.For the second week in a row, contracts signed continue to rise.

Mortgage Rate Update

For the seventh week in a row, mortgage rates continued to climb toward eight percent, resulting in the longest consecutive rise since the Spring of 2022. Rates have risen two full percentage points in 2023 alone and, as we head into Halloween, the impacts may scare potential homebuyers (see what I did there?). Purchase activity has slowed to a virtual standstill, affordability remains a significant hurdle for many and the only way to address it is lower rates and greater inventory.

News You Can Use

• Fresh Growth Numbers Are Set to Show US Remains Economic Powerhouse Bloomberg

• US Economy Delivers Blockbuster Performance for Q3 Reuters

• Jamie Dimon Rips Central Banks for Being ‘100% Dead Wrong” on Economic Forecasts CNBC

• Morgan Stanley Names Ted Pick as Chief Executive Wall Street Journal

• Deficit Doubling as US Economy Grows Shows Why Yields Are at 5% Bloomberg

• BoE Likely to Keep High Rates on Hold Even As Signs of Slowdown Mount Reuters

• Higher for Longer Rates Will Test Corporate Debt’s Maturity Wall Axios

• Five Investors on Investing in the 5% World Wall Street Journal

• Here’s What 8% Mortgage Rates Will Do to the National Housing Market Bloomberg

• Big Banks Had A Strong Q3. What About Regional Banks? CNN Business

• The Economy Was Supposed to Slow by Now. Instead It’s Revving Up. Wall Street Journal

• Car Owners Fall Behind on Payments at Highest Rate on Record Bloomberg

• Small Banks Look to Shrink Their Way Back to Health Wall Street Journal

• What It Will Take to Make Homes Affordable Again for Millions of Americans CNBC

• The Four Intersecting Risks that May Hit the Global Economy Axios

• Gramercy Park Makes NYC Cool to Travelers NY Post

• Mike Johnson Elected House Speaker Wall Street Journal

• Taylor Swift Vaults Into Billionaire Status with Eras Tour Success Bloomberg

The Deep Insight

Contact Me

Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or to share what you're experiencing in this market. Looking forward to hearing from you!