G+ February 2024 Market Update

In 2023, challenges such as high interest rates, inflation, and limited inventory impacted New York City's real estate market. Despite obstacles, the year ended with signs of stabilization. As we enter 2024, declining rates and discounted property prices may unlock pent-up demand. The market faces ongoing trends from 2023 and new challenges like the U.S. presidential election. Forecasts predict mortgage rate drops, while rents remain high. Manhattan's real estate prices resemble those of 2015-2016. 

In Q4 2023, pricing adjustments occurred due to weaker demand, leading to a 5% and 9% YoY decline in average and median price per square foot. While sales declined for the fifth consecutive quarter, the drop was less pronounced. Resale co-ops saw a 2% YoY increase. Despite uncertainties, confidence in Manhattan's market remains. In rentals, despite a holiday dip, current rents in both boroughs are higher YoY. 

Brooklyn faced challenges in 2023 but showed improvement by year-end. Closed sales declined nearly 30% YoY, but signed contracts increased. Prices fell below 2021-2022 levels. Inventory fell for the ninth consecutive quarter. While it's too early to determine a market turnaround, improved deal activity highlights enduring demand. 

Inventory in Brooklyn fell 22% YoY, with declines in various price ranges. Overall undersupply is attributed to post-COVID dynamics and sellers benefiting from low mortgage rates. Days on the market fell below the five-year average. Manhattan's actively listed units totaled 6,385, down 2% annually as of mid-December.