September 2019 Market Overview

  • Karp Dagan Team
  • 09/1/19

As the Summer (sadly) comes to an end, we saw an August with busier contract activity than it’s preceding month. The first time that this has happened all year. There was a luxury rush in June, then a drastic drop in activity in July, and perhaps some stabilization in August, as more buyers entered the scene. Interest rates are severely discounted, prices have dropped, and rents continue to rise, making it a great time to be a buyer. There is typically an uptick in activity post-Labor Day. We’ll have to wait and see if the market is truly stabilizing and rebounding as the rest of September plays out.

A Record Breaking June Followed By A Sluggish July: As buyers and sellers rushed to complete deals before a series of new mansion taxes kicked in on July 1,685 homes above $2 million traded during the month of June. This may have been the best month for Manhattan’s luxury market ever. However, July sales of Manhattan properties for $2 million or more shrank to the lowest level for any month in more than six years. Month to month, during this period, Manhattan sales fell from a record $4.9 billion to just under $1.54 billion, the lowest July total since 2009 and the lowest month overall since 2013. 

Foreign Investors Unload Property: After years of amassing huge real estate portfolios, investors from abroad sold $13.4 billion of property in the 2nd quarter of 2019, according to Real Capital Analytics. During the same quarter, foreign investors purchased $12.6 billion of real estate, the first time since 2013 that foreign investors have sold more U.S. commercial real estate than they bought in a quarter. The strong dollar may have something to do with this:  If you bought a US asset a few years ago when the Euro was above 1.3 to the dollar, selling it now when the exchange rate hovers around 1.1, you automatically create a 15% plus gain purely from the currency exchange.

Mortgage Rates STILL Dropping: Mortgage rates dropped to their lowest level since October 2016 due to weaker economic data over the past week. The 30-year fixed-rate mortgage averaged 3.49% during the week ending Sept. 5, down 9 basis points from the previous week.

Rates for 30-year home loans have only increased nine times so far this year, otherwise, they have dropped or remained flat from week to week. The 15-year fixed-rate mortgage moved down 6 basis points to an average of 3.00%. The 5/1 adjustable-rate mortgage averaged 3.30%, falling 1 basis point.

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