It’s likely that we have reached the conclusion of the upward trajectory in interest rates, which commenced back in March/April 2022. During this period, the Federal Reserve startled the global economy by implementing swift and substantial rate hikes, elevating rates from nearly zero to the current 5%. The Fed's delayed response to surging inflation is evident; similarly, their awareness of the considerable repercussions of their overly aggressive actions on the economy may also come belatedly. While these effects have not yet fully manifested, they are clearly discernible in the commercial real estate sector and among small businesses, comprising the majority of US corporations, both of which are grappling with severely restricted access to capital.
Between March 2023 and June 2023, inflation receded by 40%, dropping from 5% to 3%. Considering that it might take a few months for elevated rates to exert their influence, it's noteworthy that rates now stand higher than those in March 2023.
New Development In the midst of the leisurely days of July, New York's condominium market experienced a summer lull, with sales dropping below the pre-pandemic average for the first time in months. According to a recent Marketproof report, the sales of new condos decreased by 22% last month. This decline follows a robust spring season, which had been supported by limited inventory in the resale market. Approximately 24% more apartments have sold, so far this year, vs the pre-pandemic average. Sales of new inventory has been a bright spot in the New York market, with many recent homebuyers locked in the golden handcuffs of low mortgage rates — an outcome of federal policy meant to blunt the economic impact of the pandemic.
Rental Market Rents returned to new heights after falling a bit short in June. The median rental price rose 6% annually to $4,400, a new record for the 4th time in five months. The average rental price per square foot increased 4.3% annually to $84. The average rental price jumped 9.3% yearly to a new high of $5,588.
Compass Ultra Luxury The 2023 Mid-Year Ultra-Luxury Report provides a comprehensive exploration of $10M+ sales nationwide throughout Q1 & Q2. We invite you to explore this analysis of the ultra-luxury sector over the last four years.
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