Firstly, we want to wish you and your families a very Happy Holiday Season!
November's Manhattan real estate market saw a significant slowdown compared to typical seasonal trends. With only 662 contracts signed compared to a monthly average of 846, this November ranked 18th over the past 20 years, surpassed only by 2005 and 2008. Notably, the lower end of the market (<$1M) experienced a more pronounced decline compared to the mid ($1-4M) and high-end segments (>$4M).
As we say farewell to one of the most challenging years in real estate, characterized by sparse inventory across various categories, a surge in interest rates, high inflation, and lingering recession apprehensions, we remain optimistic about 2024.
Interest Rates Recent weeks have witnessed a decline in mortgage rates, maintaining a low stance in anticipation of the upcoming Federal Reserve meeting. According to Freddie Mac the U.S. average weekly 30-year mortgage rate has dropped for the last 6 weeks:
- October 26 - 7.79%
- November 2 - 7.76%
- November 9 - 7.50%
- November 14 - 7.44%
- November 22 - 7.29%
- November 29 - 7.22%
- December 7 - 7.03%
After a hiatus, we’re seeing financed buyers re-emerge in the market, underscoring that high rates aren’t a deterrent, and are just delaying the inevitable.
What We’re Seeing In The Market Over the past year, we've noticed a significant difference in the way renovated and unrenovated apartments and townhouses sell. There has always been a price gap, but it has grown much wider in recent years. This is due to a number of factors, including the increased popularity of turnkey properties, the cost of construction going up, the time it takes, and the limited supply of renovated homes on the market. There is a sentiment in the market that buyers don’t want to deal with ANY renovations at all and there is an argument to be made that the value of an 8-10 year old cosmetic renovation goes to effectively zero. There are exceptions to this which include - structural and historical renovation.
In addition, we've noticed a recent increase in the number of off-market apartment sales in all price ranges above $3 million. This trend was previously limited to the ultra-luxury market, but it has now spread to the broader luxury market.
Luxury Market 24 contracts were signed in Manhattan at $4 million and above last week, 7 more than the previous week. Condos outsold coops, 11-10, with 1 condop and 2 townhouses in the mix.
Brooklyn’s luxury market was back in full swing to start December, after a Thanksgiving week slump. Twenty contracts were signed for homes in the borough asking $2 million to start the month, after just 7 found buyers in the previous week. Of the 20 contracts signed, nine were for condos and 11 were for townhouses. The average asking price was $3.3 million, or $1,365 per square foot. On average, the homes spent 162 days on the market and were priced at 6% less than their original listing price.
Rental Market Manhattan experienced a third consecutive monthly dip in rents in November. The average rental price decreased by 0.47% over the last month, settling at $4,691 from $4,713. This is a seasonal trend and there is a year-over-year increase of 1.13% in the average rental price in Manhattan.
2023 Compass Stats
- For the 2nd year in a row, Compass is the #1 Real Estate Brokerage in the United States by sales volume.
- Compass agents sell nearly 2.5X more than the average agent in the industry.
- Compass has funded more than $1B in Compass Concierge projects for sellers, where Compass arranges for the cost of home improvement services like staging.
- Compass has invested over $1.5B in the Compass technology platform, the only proprietary end-to-end platform for real estate agents that allows them to better serve their buyers and sellers.
- Within 10 years of launching our first sale on Compass.com, Compass will have sold over $1 trillion dollars in sales volume.
We thank you for your continued support and look forward to reconnecting in 2024!
