Is this glass half full or half empty? The median asking price for homes in New York City jumped back over $1 million last month for the first time since June 2018, StreetEasy reports, signaling healthy values. But the 2,092 listings that went into contract represented a 29% drop from April a year ago, signaling a shortage of inventory.
With today’s elevated mortgage rates, it’s no surprise that sales this year have been more modest compared to 2021 and 2022, when unusually low mortgage rates led to surging buyer demand. The important trend to note right now is that buyers have not retreated from the market, even though mortgage rates have more than doubled since early last year.
The city’s housing market was on a correction course in 2019 due to a glut of unsold condo inventory. Now, market conditions are nearly the opposite of 2019: there’s a shortage of inventory relative to demand, particularly for pricier homes as buyers who can afford higher mortgage payments remain in the market.
The luxury segment — the top 5% of the market, priced above $3.5M — also saw steady buyer activity. In April 2023, 125 listings at this price point entered contract, compared to 146 in April of last year. The luxury market is normalizing after its record-breaking performance in 2021.
Buyers in the market for more affordable homes also saw strong competition, although it wasn’t as fierce as the market for more expensive homes. An average listing priced below $700,000 — roughly the bottom third of the current market by price point — received 13.7% more buyer inquiries in April of this year compared to April 2019. These homes are popular among first-time buyers or those hoping to downsize, due to lower carrying costs including monthly mortgage payments and maintenance fees.
The neighborhood with the most listings below $700,000 was Forest Hills, Queens, where in April there were 299 listings below this price point. Next up was Lenox Hill, Manhattan with 215 listings, and the next three were Jackson Heights in Queens (187), Riverdale in the Bronx (165), and Rego Park in Queens (145).
Maybe the glass is half full and half empty.
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