It’s time to take a look at the NYC real estate market update for Q3 2023.
To view the full reports, visit the links below:
The third quarter of 2023 provided further support that conditions in Manhattan are indeed stabilizing. The median price was up slightly year over year (2%). But the average price per square foot was down for the same time period – down 4% to $1,782. This was likely due to sellers making adjustments to pricing in light of high interest rates.
Contracts signed were down by 15% year over year but this was one of the smallest declines seen since Q2 2022. They were down much more sharply on a quarterly basis, but this was in line with typical summer seasonality. Meanwhile, closed sales were actually at 5% above their historical 5 year average.
Days on market saw an increase on an annual basis, but not quarterly. Overall inventory was down compared to both Q2 2023 and Q3 2022. The decline was likely due to sellers deciding not to list their properties, given the lackluster news about the market. But this lower level of inventory is probably what’s keeping prices steadier.
The Brooklyn market showed similar signs of stabilization. But it’s a much more challenging market for buyers, compared to Manhattan.
Closed sales and contracts signed were down steeply compared to Q3 2022 (29% and 23%, respectively). But it’s important to remember that Q3 2022 was record breaking. Climbing interest rates weren’t yet impacting market momentum at that time.
Inventory in the borough was down significantly on an annual basis, with 20% fewer listings than Q3 2022. However, days on market were up on an annual basis. The reason? Tougher to sell listings finally found buyers, which probably caused the overall average to increase
But signs of stability were more evident in other figures. For example, the median price in the borough stood at $810,000 – just 1% higher than last year. And it was only 5% higher compared to the previous quarter.
Manhattan is likely to continue to be more of a buyer’s market, given that inventory remains at decent levels. But it’s possible we could see a shift in the third quarter. If sellers continue to hold their properties off the market, that could slightly tilt the balance. Not enough to switch the market to a true seller’s market. But enough that buyers could potentially see a little dent in their negotiating power.
Meanwhile, Brooklyn is probably going to continue to stymie buyers. Like Manhattan, sellers don’t really have much reason to put their homes on the market unless they have to. And this is especially true if they’re sitting on low interest rates. However, news about high prices and stabilizing interest rates could tempt a few more sellers to list in the coming months. It probably won’t be enough for any meaningful “shift” in the market. But perhaps it’ll be enough for buyers to feel like they have a few more options.
Conditions won’t truly change in either market unless there’s a BIG shift elsewhere – either interest rates or inventory. It’s much more likely that it’ll come in the form of interest rates. But many experts don’t believe we’ll see them go down until spring or even early summer. So that’s what makes me pretty sure that Q4 2023 will be more of the same. I don’t have a crystal ball, though, of course. So we’ll have to wait and see!
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