NYC Real Estate Market Update & Trends June 2022

Real estate is all over the headlines – Interest Rates are Rising! Are We in a Housing Bubble? Home Prices Up 30%! Is the Housing Bubble Going to Burst? but Real Estate in New York City truly isn’t like anywhere else in the country. Let’s take a look at the actual numbers and trends for Manhattan so you stay on top of what is really going on in the market.

Contract signings are down significantly over last year, but 2021 was exceptionally high because of the unmet demand from 2020. There were 1,308 contracts signed this May, which is really a very healthy number of deals. It’s down just over 7% from April, but I think that is just a return to seasonality in New York City real estate, where deals slow in the summer months.

Pending sales are up a little from last month, due to that volume of contract signings in May. At 4,853 pending sales, it is down almost 11% from last year, but again, last year was an anomaly. Historically, this is a very high number of pending sales. Before 2021, hitting 3,000 was very rare and only happened a handful of times in the last 5-7 years.

Supply is down from last year, which is helping prices inch higher (see below), but it is up over 8% from April, which should give buyers a little more choice, and with it – leverage.

There were 1,986 new listings in May, which is pretty active, but down almost 10% from April, which again points to a normalizing of our market, with a less active summer season.

May’s median sales price was $1,187,000, up a healthy 5.5% from last year. However, prices briefly dipped during the pandemic, so we’re now just back to prepandemic pricing. Although I think we are on a slow, steady rise in value, we have not had a 30% jump like so much of the country. One of the best things about owning real estate in NYC is the lack of volatility. If Covid19 couldn’t kill NYC real estate, I don’t know what could.

There is no denying that interest rates are rising. As of my writing this, the national average for a 30 year fixed mortgage is 5.45%, and likely to rise. With excellent credit and a good down payment you can get a lower rate, but you buy and sell in the market you’re in. Prior to 2010, rates were well over 5% for more than a decade.

When evaluating our market, we have to take a step back and look at the bigger picture. Saying sales are down 10% from last year makes it sound like a slow market, but it is not. We’re less than halfway through the year and already have over 6,000 closed deals. If only those deals currently pending closed and no more, we’d still be on par with 2018 and 2019.

What’s happening in the market? (TL/DR)

We seem to be headed back to a more normal market. What feels like a slow down from last year, is a modest rise from pre-pandemic levels, both in deal volume and prices.

Consensus is that mortgage rates will be higher next year than they are right now. Rates are their highest in 10 years, but inflation is at a 40 year high! The last time inflation was this high, rates were over 10%. Your money will be worth less next year at the same time mortgage rates are higher.

If you’re thinking about buying, waiting isn’t going to help you. I’d suggest heading off inflation with a starter home and take advantage of rising values and building equity. Then you can afford your dream home in a few years. I’d be happy to explain all of your options to you so you can decide what’s best for you.

Cash isn’t holding value right now, and neither are stocks, but real estate is still going strong. There is no bubble, it’s a matter of supply and demand.

If you are thinking about selling, well priced homes are selling quickly, especially if they are renovated. I can help you figure out what that price is, and where you can go next.