Sales volume and transactions during the first six months of the year hit a record high. A jump in closings on new development beginning in late 2021, combined with a "buy now to save later" urgency from buyers staring down rapid housing inflation, propelled the record-setting first half of 2022. But declining contract activity and increasing inventory in recent months point to a second half likely to be marked by a rebalancing between buyers and sellers.
In the first six months of the year we saw:
- Sales volume in Manhattan rise to $15.6 billion, the highest level in a decade, with sales volume in Q2 alone up by 18.6 percent year-over-year.
- The average sales price rise to $2.1 million in Q2, up more than 10 percent year-over-year.
The record sales volume during the first six months of the year was primarily driven by leftover momentum from the "Great Move" of 2021, with agreements on new developments signed late last year officially closing in Q2 of this year. There was also an urgency to "buy now" among those sensitive to higher interest rates.
Some areas of the NYC markets are over-supplied while others are under-supplied. Real Estate markets are HYPERlocalized. While the market is recalibrating, New York real estate remains more stable than in other parts of the country.
Some items to consider as 2022 carries on:
Mortgage Rates Last week 5.3% was the average rate on a 30-year, fixed-rate mortgage, the Wall Street Journal reported. The average rate was a significant drop from the previous week, when Freddie Mac had the average rate at 5.7 percent, and mid June, when it surpassed 6 percent. Still, it is much higher than at the beginning of the year, when homeowners enjoyed an average rate of 3.22 percent. Last week’s decline was the second straight for Freddie Mac’s average mortgage rate — a relief for homebuyers who had seen rates more than double since earlier in the pandemic.
Luxury Market 19 contracts were signed last week at $4 million and above in Manhattan, 7 fewer than the previous week. Condos outsold co-ops, 11-6 and 2 townhouses were in the mix. The decline in the number of contracts is to be expected, considering the shortened July 4th week. In fact, the 10 year average of contracts signed at $4 million and above in July 4th week is 18 contracts.
New Developments Contract activity slowed across New York’s new developments in June, according to a report from Marketproof. In all, buyers signed 264 contracts, a 26 percent drop from May’s 359 deals. The slowdown has been concentrated at the lower end of the market for new condo apartments, where buyers are more sensitive to mortgage rates. Ultra-luxury buyers aren’t as reliant on borrowing and are less sensitive to its expense.