For those of you who may have noticed, my weekly Wednesday email didn’t arrive in your inbox yesterday. Because of the 4th of July holiday, the release of the Q2 market report was slightly delayed across all brokerage and analyst firms. Rather than wait until next Wednesday, I am emailing you a day late to share the 2023 Q2 Manhattan Residential Report released today by Brown Harris Stevens.
Now let’s get down to business … In summary, market performance in the second quarter of this year was down compared to the previous year for the same period, yet higher than the first quarter of this year. Using 2022 as a gauge for a second quarter comparison, the average and median prices dropped by 2 percent. However, both increased from the last quarter.
The same holds true for “number of sales”, yet on a more significant scale—compared to last year, sales were down 35 percent, yet they rose sharply by 25 percent from the previous quarter. To be fair, 2022 was one of Manhattan’s strongest years as I mentioned in April, so the comparison could be considered a bit skewed depending on how you look at it.
In full disclosure, I should also point out that the spike in numbers from Q1 to Q2 was a result of the “seasonality of the Manhattan market rather than a rebound in activity,” according to the just released quarterly report. Also, closings were 19 percent lower in Q2 of this year compared to Q2 2019, which means the market hasn’t fully returned to pre-pandemic levels as originally thought. However, it is slowly gaining traction as the decline in signed contracts tightened from 20 percent in April to 9 percent in June.
Despite a challenging first half of the year, we remain positive moving into the second half of 2023. Our CEO Bess Freedman explains, “The biggest reason for optimism is the dramatic reduction in inflation over the past year. While mortgage rates haven’t come down as much as expected during that time, we believe that will change in the coming months. Don’t expect to see 3% 30-year rates anytime soon, but then again, we don’t need record-low rates to have a healthy housing market.” She also notes that continued recovery of New York City’s economy, workers returning to the office and the waning of the banking crisis lend to that optimism.
Add to this, good news from our Chief Economist Greg Heym who reported last week that 1) consumer confidence rose in June to its highest level since January 2022; 2) weekly jobless claims fell by the largest amount in 20 months; and 3) the first quarter GDP was adjusted from a 1.4 percent to a 2 percent annualized pace in economic growth. Fair to say, there is always a silver lining if you look at the big picture.
While I’m an optimist by nature, I think we have good reason to remain hopeful about what is in store for the remainder of the year. Meanwhile, if you have questions about the Q2 market report or would like information specific to your real estate needs, please reach out.