G+ September 2024 Market Update
The New York City real estate market continues to present a complex picture for both buyers and sellers. The latest data highlights key changes, from rising prices to declining sales volume and a shrinking inventory, HOWEVER, the big news is the impending rate decrease from the FED which will be a real game changer and give a huge boost to the market through the end of 2024 and hopefully well into 2025. Here’s an in-depth look at the trends shaping the current landscape.
Key Data Overview
Median Sale Prices: The median sales price in New York State increased by 6.2%, reaching $383,500. This rise in sale prices reflects sustained demand, even in the face of affordability challenges caused by rising mortgage rates.
Pending Sales: Pending sales rose by 2.0%, totaling 24,352 units. This is a positive sign, indicating continued buyer interest despite the inventory crunch.
Closed Sales: There was a 4.7% decline in closed sales, dropping to 20,430 units. This drop highlights the ongoing pressure on buyers due to rising interest rates and the resulting affordability issues.
Inventory: Inventory dropped significantly by 14.7%, with only 23,924 units on the market. This tightening of available homes has resulted in more competition for buyers and upward pressure on prices.
Days on Market: Properties are selling faster, with a 7.7% decrease in the average days on market, now down to 60 days. This speed highlights the high demand for well-priced homes, which are moving quickly despite the challenging market.
What This Means for Buyers
Buyers are facing a tight market, with fewer listings and more competition, especially for homes in desirable areas. While there is still some negotiating power, especially in homes that have been on the market longer, the rising prices and reduced inventory mean that buyers need to act fast when a well-priced home comes onto the market.
Negotiation Opportunities: Although prices are rising, the drop in closed sales and the competitive nature of the market mean that buyers still have room for negotiation, particularly on properties that are slower to move.
Bidding Wars: The shrinking inventory has led to increased competition for the most desirable homes, often resulting in bidding wars. Buyers should be prepared for fast-moving transactions, particularly in areas with historically high demand like Brooklyn and certain Manhattan neighborhoods.
Impact on Sellers
Sellers remain in a strong position due to the continued decline in inventory. Well-priced homes are selling quickly, and the competition among buyers can drive up final sale prices, particularly in sought-after neighborhoods. However, sellers should remain cautious of overpricing, as this can lead to homes languishing on the market.
Inventory Scarcity: With inventory down 14.7%, sellers can capitalize on the reduced supply by pricing their homes competitively, ensuring a quicker sale.
Pricing Strategy: Homes that are realistically priced continue to sell quickly, while those priced too high may remain unsold longer, even in this seller-friendly market.
Looking Ahead
The market is expected to remain competitive throughout 2024. Mortgage rates are expected to improve with a potential rate cut by the Federal Reserve very soon. Sellers should consider listing their properties soon to take advantage of the current market dynamics, while buyers will need to stay vigilant and act swiftly to secure the right home at the right price.
Mortgage Rates: Lower rates may just be couple of weeks away which should provide some relief later in the year if the Federal Reserve does in fact reduce interest rates. This should lead to an increase in inventory as more sellers decide to list their homes and should kick start the entire market.
Summary
The NYC real estate market is in a state of transition, with rising prices, fewer sales, and a shrinking inventory. Sellers continue to benefit from the high demand and limited supply, while buyers face more competition and faster transactions. However, those prepared to act quickly and negotiate effectively can still find opportunities in this fast-paced market.
