It’s time to take a look at the NYC real estate market update for Q4 2023.
To view the full reports, visit the links below:
While we can’t say for sure if the Manhattan sales market has found its “bottom” yet in this cycle, Q4 2023 metrics indicate that we may be hovering around there.
Closed sales were down 3% compared to Q4 2022, but this was the smallest annual decline seen since mid 2022. Sales did, however, still slide on a quarterly basis (13%).
The median price rose just a bit to $1,125,000 – up 2% compared to last year. But this was due to a higher number of large apartments being sold to all cash buyers.
The average price per square foot was a better reflection of what’s been happening in the market. Prices were down both on an annual (5%) and quarterly basis (3%). This was due to sellers adjusting their prices downward because higher interest rates restricted prospective buyers’ purchasing power.
Days on market also reflected the slower state of the market, as they were up 6% year over year and 9% quarter over quarter. However, inventory didn’t pile up and was down on an annual (2%) and quarterly basis (1%). The reason? High interest rates made selling less appealing to homeowners, and there was very limited new development supply which hit the market.
It’s harder to say where things are headed for the Brooklyn sales market, as the metrics were more mixed.
Closed sales were down significantly both year over year (25%) and quarter over quarter (27%). In fact, this was actually the lowest fourth quarter for sales in the last 3 years. However, contracts signed showed the opposite trend. Signed contracts were up both annually (3%) and quarterly (16%).
The median price fell to $725,000, which was lower on both an annual (3%) and quarterly (8%) basis. The average price per square foot for the borough likewise took a tumble – down 8% compared to both Q4 2022 and Q3 2023.
Inventory reached a record low of 1,262 listings – a 22% drop compared to Q4 2023 and a 19% drop compared to the previous quarter. Some of this was due to seasonality, as listings tend to decline around the holiday season. But it was still quite pronounced. This sharp decline in inventory likely accounted for the annual increase in days on market, which was up 14%. With fewer options to choose from, lingering listings finally found buyers and that bumped up the average.
It’s still a buyer’s market in Manhattan and will likely continue to be that way for the rest of the winter. A surprisingly strong December rental market means rental prices may stay at historic highs. And this could make more buyers interested in the prospect of owning. Things could shift a little more in seller’s favor if interest rates continue to decline and more buyers enter the market.
The market in Brooklyn will continue to be challenging for buyers due to the low levels of inventory coupled with high demand. But buyers may start to see some relief in the coming weeks and months as some sellers who decided not to list during the holiday season finally list their homes for sale.
That relief may be short lived if a lot of buyers take advantage of lower interest rates and jump into the market. However, the combination of news about good prices plus lower interest rates may also encourage more sellers to sell. And this could end up having a compounding effect of awakening the market further.
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