A New Economic Landscape - What Lies Ahead: As we move into a new era shaped by single-party control of the White House, Congress, and Senate, several proposed policies signal a dynamic year ahead. Key changes include prospects for accelerated economic growth, higher wages, reduced regulations, and lower taxes. However, these opportunities come with challenges, such as potential inflation from tariffs and shifts in the labor market. The effects of increased government efficiency and advancements in energy development are still unfolding, while elevated bond market rates could persist as the economy adjusts.
Navigating Rate Hikes: The real estate sector has faced significant headwinds due to sharply higher mortgage rates, driven by the Federal Reserve’s aggressive interest rate hikes. These increases, initially delayed, were implemented rapidly to curb inflation—proving more prolonged than many had anticipated. The impact on buyers, sellers, and investors has been profound, reshaping market dynamics in unexpected ways.
Exiting 2024 - A Resilient Economy: As we close out 2024, the U.S. economy remains robust. Despite concerns about rising debt and deficits, key metrics such as GDP growth, employment, productivity, wages, and asset values highlight enduring strength. Globally, rising prices have become a shared challenge, largely driven by pandemic-related supply chain disruptions and the ripple effects of ongoing conflicts.
In these times of change, resilience and adaptability remain key.
Mortgage Rates: While today’s interest rates are significantly higher than those of 2020-2021, they remain far below the peaks of past decades. There is a growing recognition that current rates, largely influenced by the 10-year Treasury, are here to stay at elevated levels, even if they ease slightly in the coming months. The truth is clear: the 2-3% rates we grew accustomed to were an anomaly, not the norm.
Luxury Market: In a Thanksgiving Day-shortened week, 19 contracts were signed in Manhattan at $4 Million and above, besting the 10-year Thanksgiving week average of 16 contracts. The previous week saw 22 contracts signed, and the one before that saw 37, totalling $365,685,000 in volume, making it the largest volume week since December 2021. The first week of the month saw 39 contracts signed. The Brooklyn market saw similar results, even topping $100M in volume during the second week of the month. The luxury market was extremely busy in November.
Rental Market: In October, 1 in 5 rentals offered at least one month free, according to StreetEasy. Meanwhile, the median asking rent in NYC stood at $3,676, marking a 2.1% increase year-over-year but a 2.0% decline from September. This monthly dip slightly outpaced the typical seasonal decrease of 1.8% seen between 2017 and 2019, as colder months often bring less demand for moves. While asking rents are still on the rise, the annual growth rate has slowed compared to last year, signaling a more balanced market. Going into 2025, we believe rents will rise at a rapid pace due to (1) a shortage in housing development and (2) recent legislation requiring landlords to cover broker fees, which we believe will lead to these costs being incorporated into rental prices.
Christie’s International and @properties Join Compass: We are excited to share that this week Christie’s International Real Estate and @properties will be joining forces with COMPASS! Christie’s International Real Estate is one of the world’s top luxury real estate brands, in association with Christie's Auction House founded in 1766 - with a global network of 100+ affiliates across 50 countries and territories and @properties is the 8th largest residential brokerage in the US by sales volume. We're incredibly excited about the many opportunities this will create for our clients.
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