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How Hot Is the City's Real Estate Market? Lukewarm.

New York City

Co-op and condo prices, lack of supply, lukewarm market, rising interest rates.
June 23, 2023

Typically, either the buyers or the sellers of New York City co-ops and condos are in the driver's seat. But today, according to a new report recapping the spring Manhattan sales market from real estate data site UrbanDigs, neither side has the upper hand. Today's market is neither hot nor cold. Call it lukewarm. Or room-temperature.

John Walkup, UrbanDigs co-founder and author of the report, notes Manhattan buyers are out in force but they're stymied by a lack of listings, Brick Underground reports. That’s because sellers are reluctant to put apartments and houses on the market since many would-be sellers are sitting on mortgages that were written when rates around 3% — and now they're around 7%, deterring sellers from buying elsewhere.

Because of this, the Manhattan real estate market is in a state of equilibrium. “The generally lower supply has served to keep the market’s day-to-day transactional dynamics in balance, with neither buyers nor sellers holding a genuine advantage,” Walkup writes. 

The number of new listings each month "has remained somewhat muted, with 2023 levels at or near the lowest levels of the last several years." About 1,500 new Manhattan listings came on the market in May, just below levels seen in May 2022 and May 2021.

The number of signed contracts is following seasonal trends and is above the level seen in 2019, but below 2021/2022 levels, he writes. For 2023, signed contracts rose from about 500 in January to just under 1,000 in May.

Median sales prices by signed contract for studio, one-, and two-bedroom co-ops have been somewhat stable since January 2019, while three- and four-plus bedrooms are more volatile, because of fewer deals. The median price for a three-bedroom, for example, crossed the $2.5 million in May 2020 and again in March 2023.

Median sales prices by signed contracts of studio, one- and two-bedroom resale condos are relatively stable “with some minor upticks and downticks." For example the median price for a studio appears to have remained near $1 million since January 2019, while median prices for three- and four-bedroom units have much sharper highs and lows, dropping below $3 million and as high as $12 million over the past three years.

With fewer deals happening, the median discount from the original asking price has remained relatively high, hovering around 6% as of March. A year ago, it was around 2%.

UrbanDigs data covers Brooklyn but not Queens. However, Walkup says, “from what we can see, the dynamics in Queens and Brooklyn are similar to Manhattan.” For example, when it comes to listings, days on market and price cuts, buyers and sellers in both boroughs are in equilibrium.

In other words, the temperature stays pretty much the same wherever you go in the city.

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