Recently I’ve had clients reach out with concerns about Manhattan’s real estate market and where it is headed, so I thought I would touch on this for any of you who may share those same concerns. As I noted a few weeks ago when the Q2 report was released, the market is in transition and we’re simply leveling off to normal volumes, as pointed out by Brown Harris Stevens CEO Bess Freedman.
While the market has slowed down considerably, it is by no means anywhere near crashing. We experienced phenomenal, record-breaking numbers last year, so the comparisons can appear a bit alarming. I remind customers to keep in mind that summer months are typically slow, so some of what we’re seeing is the seasonal volume we were used to pre-pandemic.
Inflation, mortgage rates and fear of a recession are also contributing to the current lull, as I’ve mentioned before. Because demand is not where it was earlier in the year, sellers are now having to compete on price. According to Urban Digs, there were 25% more price cuts over the past three months compared to last year.
As we make our way into the fall season, we could very well expect for sales volume to pick up a tad. Keep in mind however, the midterm elections in November may impact sales activity slightly, as well as the looming recession, which most likely won’t be “devastating” according to Randall Kroszner, former Federal Reserve Board Governor.
I hope this information is useful, especially to those of you who are looking to sell or buy within the next six months. I’m happy to get on a call to talk through this further and address any of your concerns and questions.