The NYC Real Estate Market Performance at the End of Q1

The Weekly Recap

US pending home sales rose for the third straight month, Moody's sees limited US credit risks from banking crisis. Housing prices in tech hubs are cooling faster than the broader market, a bank almost no one has ever heard of named First Citizens acquired most of Silicon Valley Bank's assets, the US is mulling more support for its banks, a new study found the trend of remote work is down from its 2021 peak and ChatGPT can now browse the internet putting us one step closer to a reality dictated by Terminators.

The NYC Real Estate Market Performance at the End of Q1

As the first quarter of 2023 comes to a close, the New York City sales market has experienced significant growth and changes, with data showing a resurgence in demand for properties.

According to a report by DE, the number of signed contracts for co-ops, condos, and single-family homes in Manhattan increased by 43.3% in the first quarter of 2023 compared to the same period in 2022. The report also shows that the median sales price for a Manhattan apartment increased by 12.5% to $1.4 million. This increase in demand and median sales price is due to the lifting of pandemic restrictions and a return to more traditional forms of living, with many people wanting to return to the city after months of remote work.

In Brooklyn, the market saw a 26.1% increase in signed contracts and a 12.8% increase in the median sales price compared to the first quarter of 2022. The median sales price for a Brooklyn apartment is now $900,000.

The luxury market in Manhattan saw a significant surge in sales, with a 36.6% increase in the number of signed contracts for properties priced at $4 million or more compared to the same period in 2022. This trend is consistent with the overall increase in demand and a shift towards more spacious and amenity-rich properties, with buyers willing to pay a premium for high-end properties.

Although demand is higher, inventory remains a challenge for buyers, with a report from StreetEasy showing that the number of available listings in Manhattan and Brooklyn decreased by 3.2% and 5.7%, respectively, compared to the first quarter of 2022. This has led to a highly competitive market, with bidding wars and quick sales becoming the norm if homes are priced correctly.

The first quarter of 2023 also saw a significant shift towards environmentally sustainable properties, with a growing number of buyers seeking properties that offer energy-efficient features. A report by UrbanDigs shows that the number of eco-friendly properties on the market increased by 20.9% in Manhattan and 14.3% in Brooklyn compared to the first quarter of 2022.

Market Performance

Here are how some other asset classes performed this week as of this mornings opening bell.

NYC Market Update

As we end Q1, here is a view of new inventory that has come onto the NYC market as well as newly signed contracts that have taken place over the last month

Mortgage Rate Update

Economic uncertainty continues to bring mortgage rates down. Over the last Several weeks, declining rates have brought borrowers back to the market, but as the spring homebuying season gets underway, low inventor remains a key challenge for prospective buyers.

News You Can Use

• US Pending Home Sales Rise for Third Straight Month; Loan Demand Increases Reuters

• A Tale of Two Housing Markets; Trends East vs. West WSJ

• Where Financial Risks Lies in 12 Charts WSJ

• Home Prices Cool in January, Even Falling in Some Cities CNBC

• Housing Market in Tech Hubs Cooling Faster Than Other Parts of the US Reuters

• Consumer Confidence Rebounds Amid Inflation, Bank Crisis Fox Business

• Bank of England Governor Andrew Bailey Dismisses Chances of Financial Crisis Financial Times

• Fed's Barr calls Silicon Valley Bank Failure a 'Textbook Case of Mismanagement' CNBC

• First Citizens Shares Hit Record High in Wake of SVB Purchase Reuters

• US Backstops SVB Sale to First Citizens Reuters

• Why Analysts Say Banks Will Be Fine CNBC

• Banking Stress Puts US and Europe On Watch for Credit Crunch Reuters

• Here's Why the US Had to Sweeten Terms to Get the SVB Sale Done CNBC

• US Mulls More Support for Banks While Giving First Republic Time Reuters

• How the Banking Crisis Could Ripple Through the Economy Axios

• Will Bank Crisis Ruin the Economy? NYT

• Moody's Sees Limited Risks From Banking Crisis on US Credit Profile Reuters

The Deep Insight

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