Happy New Year!
Welcome to the January edition of my monthly newsletter. As we usher in 2024, I wish you and your family health, happiness, and prosperity in the coming year.
In this issue, I once again explore some of the latest trends, opportunities, and challenges shaping the real estate markets in Brooklyn and Manhattan. Whether you're contemplating a move or simply staying current on the property landscape, this newsletter aims to be your resource for insightful analysis, the latest news, and upcoming events.
2023 in Review
Last year marked a distinct shift in the Brooklyn and Manhattan markets from a supply and demand perspective. Overall supply dipped in both markets as compared to the previous two years. Brooklyn experienced a more notable decline, diverging from Manhattan's more seasonally consistent patterns. While demand was strong in the early part of the year, it softened as interest rates neared 8%, tipping the scales in favor of buyers throughout much of the latter half. The extent and duration of that shift was more pronounced in Manhattan than in Brooklyn. Nonetheless, a resurgence in demand towards year end hints at a more active market ahead, possibly tilting negotiating leverage back towards seller.
Current Landscape
In 2024, the prospect of lower interest rates, new supply, and a stabilizing economy should invigorate the market. While we might not witness the dramatic supply surge of the pandemic era or the robust demand of a 3% mortgage rate environment, an uptick in activity is anticipated. Early signs in December are promising. Now that we are past the holidays, we'll see if this momentum resumes after mid-January.
Buyer and Seller Dynamics
Should interest rates decline (or the outlook improve), I would expect to see more active buyers, increased demand, heightened competition, and a rise in prices as we roll into Spring. Ironically, many buyers often enter the market post-rebound, end up missing the low point in prices. This is usually a result of apprehension and uncertainty stemming from economic volatility and a misreading of market cues due to opaque and lagging market indicators. Presently, there's a window for buyers to leverage stale listings and negotiate with sellers. Note however, that window may soon close as we near February/March and a possible swing back to a seller's market.
Market Insights
For Buyers: The pre-Spring period might be your opportunity to find a deal. With over 3,000 listings in Brooklyn and Manhattan lingering on the market for more than 120 days, many of which have seen price drops, the stage is set for negotiation with stressed sellers. This is particularly the case for overpriced listings that compare unfavorably to new product coming to market.
For Sellers: A more favorable market is on the horizon compared to Q4 of 2023. However, a short-term uptick doesn't guarantee a sustained seller's market. Be sure to engage and consider reasonable offers promptly as your buyer interest can be easily cannibalized by a flood of new and possibly more favorable inventory during April and May.
Advice
Sellers: Temper your expectations and be poised to leverage any upswing. The market remains buyer-geared, but signs of a shift are emerging. With Spring approaching rapidly, it's prudent to start prepping your home to avoid missing the peak selling window. And remember, even if the market shifts in your favor, an overpriced home can quickly turn into a failed listing.
Buyers: Waiting for further price drops might lead to missed opportunities. The market's recent rumblings suggest a tilt towards sellers. Look for opportunities now. If you've been delaying your mortgage pre-approval, now's the time to get it done. Be prepared to act quickly so that you can capitalize on the right situation when it arises.
Market Timing
For buyers, the stretch from mid-December to January traditionally offers unique opportunities with less competition. Sellers, on the other hand, often find Spring to be a prime time for listing given greater buyer focus, online searching and foot traffic. As 2024 unfolds, staying abreast of market trends and timing will be key to making informed decisions.
Enjoy this month's analysis, news, and events, and please reach out with any questions or if you require assistance with your real estate needs.
Wishing you all the best for a prosperous year in real estate,
Steve
