The New Reality of the Sales Market in NYC

The Weekly Recap

Good Morning and hope you enjoyed the short week! Mortgage rates fell again to the lowest rate in 3 months while home sales nationwide have fallen to the lowest level in a decade. Nvidia is now the most valuable company in the world. Golden Goose pulled their IPO, the S&P 500 hit a record high for the 30th time in 2024, housing construction slowed down in May and Elon Musk doesn’t think the world is having enough kids.

The New Reality of the Sales Market in NYC

New York City is finally starting to see some growth across the sales market over the first half of the year. A market environment that has been starving for inventory has seen a moderate increase in new homes hitting the market between January and May, up 1.4% from last year, which is the first increase seen since 2022. The market that these sellers are returning too though, is vastly different from the one a few years ago as elevated mortgage rates are making buyers with the ability to buy under these market conditions more patient and unwilling to overspend.

While homes that are priced well are selling incredibly fast, homes that are over-priced have been sitting and languishing on the market due to the patience of buyers waiting for better inventory to come to the market. Homes that have sold were priced about 2% lower than similar listings and spent a third of the amount of days on the market compared to homes still looking for buyers. May also saw roughly 15% of homes on the market being sold above the initial asking price compared to about 14% of homes a year ago.

Sellers who continue to have higher asking prices than what the market bears will be under pressure to rethink their pricing strategy as the most challenging detail for a seller to compete with is how long they have been on the market. When new inventory comes on that are priced correctly, older listings will need to compete for the attention of buyers.

New contracts in the city also rose annually, so far this year at a rate of 1.2%, another metric that has not seen an increase since 2022. Asking prices in Manhattan stagnated while the outer boroughs saw increases.

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.

Mortgage Rate Update

Mortgage rates decreased for the third straight week following signs of cooling inflation and market expectations of a future rate cut. Lower rates coupled with gradually improving housing supply bodes well for the housing market. If you’re an aspiring homebuyer, its important to remember that mortgage rates can vary widely by institution and you should shop/compare rates.

News You Can Use

• Mortgage Rates Fall to Lowest Levels in Three Months CNN

• US Labor Market and Housing Data Point to Slowing Economy Reuters

• Fed’s Kashkari Says It’s ‘Reasonable’ to Predict a December Rate Cut Reuters

• Nvidia Ascends to Most Valuable Company Surpassing Microsoft and Apple Wall Street Journal

• China and Britain Face an Exodus of Millionaires Bloomberg

• How One of New York City’s Dingiest Neighborhoods Became a New Tech Hub Fast Company

• NYC Board Hikes Prices 2.75% for Rent Stabilized Apartments Bloomberg

• US Home Sales Lower in May Nationwide on Higher Rates and Record Prices Reuters

• Retail Sales Stay Weak in May As Consumers Remain Cautious Axios

• US Consumer Sentiment Unexpectedly Falls to Seven-Month Low Bloomberg

• The S&P 500 Hits Another Record Bloomberg

• US Retail Sales Barely Increase in Sign of Consumer Strain Bloomberg

The Deep Insight

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