With volatility in the financial markets and fears of a recession rising, will property grow more alluring? Or will prices peak? As we track the trends, the answer may be both. Across the country, home prices have been sky high, but buyer sentiment dropped to the lowest level in nearly two years last month. Experts believe the tides may be turning despite rising interest rates, citing that existing home sales have been mirroring buyer sentiment, slowing activity in the market and giving buyers more power.
In Miami, luxury market flippers have been cashing in. Prices continued to climb throughout May and the once notoriously risky business of flipping has regularly proven to be smart investing. However, waterfront properties have become so expensive that buyers are beginning to look inland. Does that mean prices have peaked? The median price of a Palm Beach single-family home jumped 51 percent to about $10 million in the first quarter of 2022, according to Douglas Elliman reports. In Miami-Dade County sales of luxury single-family homes fell about 4 percent in that same time period, yet luxury condo sales increased 43 percent.
Following a year of record-setting luxury home sales in New York City, homes entering into contract at $4 million and above dwindled in the last week of May. Whether it’s the rising interest rates or economic uncertainty, buyers have taken a step back in both Manhattan and Brooklyn, allowing for an uptick in inventory on the market to ease tensions and minimize bidding wars. New listings in Manhattan were up 18 percent for condos and a whopping 80 percent for one- to three-family properties. After months of increasing contract signings in Manhattan, they declined 7 percent for co-ops and increased just 2 percent for condos from May 2021. In Brooklyn, newly signed contracts fell across all property types: 6 percent for co-ops, 6 percent for condos, and 13 percent for one- to three-family homes.
Rentals in the Hamptons are still hot commodities, but market sales are slowing and showing signs of stabilization. However, while supply rose a healthy 13 percent, it’s still down annually by 25 percent and prices remain high. The median sales price is currently at $1.4 million. It’s a similar story in North Fork, where inventory was down to just 89 homes at one point in May, down 26 percent year over year. The rest of Long Island saw an uptick in inventory, aligning with trends in Manhattan, Brooklyn, and the rest of the nation.
A similar 12-month streak of annual drops in signed contracts persisted in Westchester, where newly signed contracts fell 5.4 percent for single-family homes and 27 percent for condos. Experts are blaming a lack of new listings. That being said, with inventory remaining low, sale prices are remaining high. The luxury market specifically has seen incredible movement this month as New York City buyers continue to look towards the suburbs for both primary and secondary residences.
At ESPINAL | ADLER, we’re here to analyze the trends and share our knowledge with you. As an addition to that knowledge, we’re excited to announce that Andrew Cohen has joined our team as an agent with over 18 years of experience and expertise in Miami Real Estate. If you or anyone you know is interested in discussing the Miami market, feel free to reach out to us!