Every NYC brokerage firm is being pulled into an antitrust lawsuit right now, including my firm, Brown Harris Stevens. So I cannot comment on that.

However, I can talk about what is going on in the housing market.

First, our latest inventory report came out. These were my thoughts:

Because the absolute number of properties being marketed across Manhattan has not changed up or down appreciably from this time last year, it brings the slower pace of sales into sharp relief. Zooming in on Downtown, its condominium inventory continues to find buyers at surprisingly resilient prices, though its cooperative inventory casts a slight shadow on an otherwise solid performance. Meanwhile, the East Side and West Side have also continued to see a healthier pace of sales than most other neighborhoods, while Upper Manhattan and Midtown East/West have seen transactions slow to a crawl. 

If there is one takeaway, it is to say that our customers are finding value today in the Manhattan residential market. Well-capitalized buyers should take note, especially those willing to take on renovation. What will happen in the New Year is yet unclear. But as mortgage rates have softened in the past few weeks, and many buyers turn their eyes to family and friends, the smart primary home buyers and investors will want to sharpen their pencils—right now—before this buying window closes. 

And from where I sit, I have to make the call:

We’re at the bottom.

What would prompt me to say this? Am I nuts? Maybe. But I can share five indicators that lead me to this conclusion:

1. Mortgage Rates have peaked. No one things that rates are going back up from here. We appear to be a on a downward trend. I can’t predict how quickly or how far they’ll fall, but they’re softening. Lord knows that every bank blew this call in 2023. And I made the mistake of believing them about a year ago. But now? The writing is on the wall.
2. Buyers are bidding like crazy on our listings. Even since I wrote my thoughts above, things have started to shift. Properties that have been on the market for longer than we’d like are getting nibbles. Those properties that have had a few price cuts are seeing increased traffic. Almost everything we have is selling. At every price point. Right when things are supposed to be slowing down.
3. Listings are going into contract as an increased pace. Now this is NOT what you’re going to read about. But I’m seeing it in real time. For example, when we recently went to schedule showings for our buyers on the West Side, three out of the four targeted properties had accepted offers, contracts out, or signed contracts that had not yet been noted in the listings system. And let’s not forget. The pace of sales even in Q3 of 2023 was BETTER than the same quarter in 2018 AND 2019. So the pace is already better than what people think it is.
4. I’m hearing the same thing from other agents across Manhattan. Yes, we agents talk. And I don’t listen to those who are complaining, but my ears do perk up when I hear those magic words: I’m busy. I enjoy time with family as much as anyone does, but at a time when transaction volume has slowed to a crawl, I’m delighted to hear that activity has picked up.
5. Brooklyn never slowed down. I’m hearing about disgusting townhouse shells getting 30+ attendees at open houses, and things briskly selling over asking. High mortgage rates didn’t move the needle in neighborhoods with no inventory.

The Caveats

This doesn’t mean that we’re out of the woods. What are my caveats?

• Units that need work are still scaring the hell out of buyers. How much will it cost? How long will it take? How annoying will coop and condo boards be about doing work? What other surprises are in store? Those units will get discounts.
  
• First-time buyers are still feeling the pain of higher mortgage rates. So this will still put pressure on pricing for one- and two-bedroom units.
  
• While New Developments have continued to see strong numbers, they have seen a slowdown in the past two months. They may not see the same strengthening as other segments, because they already had seen it.
  
• Buyers and sellers are unlikely to always agree on what constitutes a property needing a renovation. Buyers have been increasingly picky over the past few years. So if a building doesn’t allow washer/dryers, or central a/c, or has extra high monthly charges, or some other quirky rule or qualification, that is likely to hold back appreciation, even as things improve. Winners and losers will emerge. That is not necessarily to be condominiums, and not any particular price point.
  
• Certain neighborhoods may recover more quickly. That’s likely to be the Upper East Side and Upper West Side, and Downtown, more readily than Midtown, per se.
  
• Buyers across will be expecting discounts. So the mindset of a buyer will be as much of a challenge as anything. Sellers will have to think strategically and carefully as we head into 2024.

All of That Said

I am extremely encouraged by the signs in the market. And I expect a surprisingly strong start to the housing market in 2024.

Want to dig into this conversation? Be in touch and we’ll go neighborhood by neighborhood, unit size by unit size, and price point by price point. There’s a lot more to discuss! -Scott & The HRT