The post-Labor Day listing frenzy is in full effect for those owners who have been waiting until the end of summer to put their apartments up for sale. There are many great options on the market for buyers while rates are still at historically low levels.
Insights to Consider:
- New Dev Becomes More Affordable. The median price for new development units in Manhattan fell 19.2% year-over-year to $2.7 million from $3.3 million, while sales volume fell from 556 to 352. Of those sales, 16% of units were sold below the $1 million price point (the largest share for that price range in two years), 39% sold between $1-$3 million, and 44% sold above $3 million. The pipeline of new development units in Manhattan has remained stable, with 1,029 units on the market, on par with last year’s 1,021. Decreasing new dev prices skew the overall median price for the market. Looking at the numbers with new dev, the overall sales market saw a 7.5% decrease since last year but just looking at resale the market is up 1%.
- Luxury Owners Need to Be Patient. Manhattan luxury listings continue to linger as buyers wait them out. Home listings above $4 million are now sitting on the market for an average of 439 days, and when the properties do sell, it’s at an average 9% discount from the asking price. Deals are still getting done in the luxury segment of the market but they’re taking more time and at deeper discounts than before.
- Rents Back on the Rise but Flat in Manhattan. Rents seasonally rise in the summer and Queens posted the highest rent hike in the country in August, registering an 8.4% year-over-year increase to settle at an average rate of $2,342. This was followed by Phoenix, Arizona, which had the second-highest rent increase at 6.8%. Manhattan and Brooklyn also registered price hikes of 1.6% and 3.9%, respectively. The national average rent stood at $1,412, up 3.1% from the same month last year. Manhattan’s was one of the lowest growth rates in the country. In 2013 – 2016 Manhattan experienced 3 – 5% increases vs 1.6% this year. The Core Inflation Rate in 2018 is expected to be 1.8%. Taking this into consideration, rents in Manhattan remained virtually flat.
- Cheap Money Countdown. Mortgage rates rose for a second week, boosted by a selloff in the bond market. The 30-year fixed-rate mortgage averaged 4.54% in the week of September 5, according to Freddie Mac’s weekly survey, up to two basis points since last week. Mortgage rates follow the path of the benchmark U.S. 10-year Treasury note. It would be likely that we get two more rate hikes this year. Mortgage rates are still historically low, but the days of very cheap money are waning.