Throughout the past year, the New York City real estate market grappled with low inventory and increasing mortgage rates. However, in recent months, there has been a subtle shift with rates showing a downward trend. This shift is further underscored by the Federal Reserve's recent decision to pause interest rate hikes and even hint at potential cuts in the coming year. As I mentioned a few weeks back, this suggests a potential uptick in both listings and demand on the horizon, i.e., sellers may feel more inclined to list their properties as rates decrease and buyers may be more willing to accept slightly higher interest rates, say around 6 percent.
Well today, I’m eager to report that we are now witnessing what appears to be the anticipated market shift, evidenced by a rise in contract signings. According to a recent report by appraiser Miller Samuel, Manhattan saw a 13 percent increase in newly signed contracts for co-ops and a 9 percent increase for condos compared to the previous year. Similarly, in Brooklyn, there was a significant uptick of 59 percent in co-op contracts and 26 percent in condo signed contracts.
This evolving landscape indicates a potential turnaround for the market as it begins to demonstrate signs of recovery. While it may be premature to make definitive conclusions, this recent activity aligns with our expectations of increased confidence among both buyers and sellers, with mortgage rates playing a pivotal role.
Notably, the luxury market—generally less impacted by interest rates due to its predominance of all-cash transactions—also reported robust numbers in January, marking the best performance in four months with 25 contracts signed for homes priced at $4 million or more. This further reinforces the notion that the market will slowly but steadily continue exhibiting stability and growth, albeit the luxury sector tends to perform better overall.
I will continue to monitor this movement closely, especially as we approach the spring market. If you're considering buying or selling and have questions about timing or strategy, feel free to get in touch. I'm happy to discuss with you, and there's absolutely no obligation to work with me.