Here are the ingredients: the average rate on the benchmark 30-year home loan just fell for the second week in a row (from 7.75% to 7.5%), after reaching a 22-year high in October; since interest rates, though declining slightly, remain double their pre-pandemic levels, more than one-third of home sales nationwide in September were all cash; owners unwilling to sell their homes and forfeit a low mortgage rate are contributing to a scarcity of inventory, which is pushing prices higher. Put those ingredients in a skillet, scramble vigorously over high heat — and you have today's mixed-up New York City co-op and condo market.
Those slightly declining but still high interest rates are “exacerbating inequality between people who own homes and people who don’t,” Redfin Senior Economist Sheharyar Bokhari tells The New York Post, adding that prices for homes are up 40% compared to the pre-pandemic buying boom, and borrowing rates “made the divide even bigger by adding more to monthly payments.”
Redfin reported that all-cash purchases haven’t been this common since 2014, when affluent buyers and corporate investors led the housing market recovery after the housing bubble burst in 2008. For those who can afford it, buying a home with cash becomes more attractive in a market where mortgage rates are hovering between 7% and 8%.
Indeed, all-cash purchases made up 72% of new development condo sales in Manhattan last month, more than double the national average, The Real Deal reports.
Meanwhile, according to Realtor.com, available housing inventory in New York City is either flat or declining. Compared to one year ago, listings in Manhattan are up 0.8%, while listings in the outer boroughs are down — by 16.6% in the Bronx, 15.2% in Queeens and 8.5% in Brooklyn.
Co-op and condo board business broken down into bite-sized bits - 2 stories each week. Read now on all digital devices.