June 2022 Market Overview

  • 06/1/22

We are pleased to share that The Karp Dagan Team has been included in this year’s RealTrends America’s Best Real Estate Professionals, which honors the top 1.49% of more than 1.6 million licensed real estate professionals nationwide. Thank you for your continued support and being part of a banner year.

 

Historically the spring is the peak season for Manhattan sales activity and then there is a seasonal summer slowdown to follow. Since mid-April supply has continued to accumulate, and pending sales have dipped compared to 2021, but we’re still historically busy compared to pre-Covid numbers. Buyers have remained resilient despite high inflation, rising interest rates, increased recession talk, equity and crypto markets plunging, growing political division, higher crime, rising Covid cases, etc. Existing home sales in the U.S. are expected to drop 6.7% by the end of this year, compared with 2021, according to some forecasts,  a major revision from its earlier forecast, where it projected a 6.6% rise over last year. The increase in borrowing costs since the beginning of the year and looming economic uncertainty means people aren’t in the same rush to buy. But even if home sales come in on par with the new projection, 2022 would mark the 2nd-highest tally since 2007, trailing only 2021. Inventory also is forecast to improve by 15%, up from the 0.3% predicted earlier this year.

 

At the same time, the rental market remains on fire, with significantly more demand than supply, and pricing records.

 

Some items to consider as 2022 carries on:

 

Mortgage Applications Decline For the week ending June 3, the Mortgage Bankers Association’s index measuring mortgage loan application volume dropped 6.5% from the week before, sinking to its lowest level in 22 years. Driving the decline are increases in mortgage rates and home prices and the scarcity of homes for sale. Rates have been rising all year, predating the Federal Reserve’s efforts to slow the economy, and the average rate on the popular 30-year fixed mortgage rose 10 basis points to 6.28% yesterday: The rate was 5.55% one week ago. The increased rates led to drops in the MBA’s refinancing and purchasing indices.

 

Median Rent in Manhattan Reaches a New High The median rent in Manhattan reached $4,000 in May, the highest price ever reported. This was a nearly 2% increase from April and more than a 25% increase from May 2021. The average rental price in Manhattan was just under $5,000 in May. Meaning the average renter has to make $200,000/year to qualify for an apartment. The recent rise has been spurred by more people returning to the city in recent months, high mortgage rates and remote work that justifies paying higher rents for some tenants who have put more value on their home spaces.

 

Luxury Market 25 contracts were signed last week at $4 million and above in Manhattan, three fewer than the previous week. Surprisingly, the top three sales cracked $20 million, despite another miserable week in the stock market sparked by unrelenting inflation and high interest rates.

 

Compass Debuts on the Fortune 500 We are thrilled to announce that Compass has found our home on the Fortune 500 alongside some of the world’s most respected companies like Apple, American Express, and Nike! In less than 10 years, we have become the #1 real estate brokerage in America (RealTrends 500) and one of the youngest companies ever to make the Fortune 500. In the last year alone, almost a quarter-million clients put their trust in a Compass agent as they made one of the biggest decisions in their life – buying or selling their home.

 

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