As interest rates rise and inflation looms, economic uncertainty is certainly affecting the housing market nationwide. While it’s easy to generalize negatively and extrapolate the effects, it’s not all as scary as it might seem. That’s why we’re here – to dig into the details and work with you to make educated decisions for your personal situations.
In general, listing inventory continued its multi-year trend of year-over-year decline, but the quarter-to-quarter increase was higher than expected, meaning people are still making moves.
As New York City’s housing market cools from the recent highs, a new trend is emerging: sellers are pivoting to landlords, opting to hold off on selling their units and rent them out instead. For this trend to work for you, it’s imperative to have a good knowledge of things like sublet policies for co-ops, maintenance requirements, and the legal obligations of being a landlord.
This pivot to rentals may account for some of the decline in Manhattan’s inventory. It also correlates with some buyers exiting the market. Because lower-end buyers are more sensitive to mortgage rates, many have taken themselves out of the market and returned to renting.
Manhattan price trends continued to rise from the prior year and pre-pandemic levels. Median sales price rose 10.6% annually to a record $1,250,000, exceeding the previous record set in the same period three years ago. Although new signed contract activity has been easing over the past several months as indicated in the recent “Elliman Report: June 2022 New Signed Contracts” as mortgage rates jumped, closed sales still rose 12.2% to 3,834. This suggests that the current quarter represents a peak period of closed sales activity.
Brooklyn’s housing market has been consistently strong, with at least 2,000 condos or co-ops sold in the borough for five consecutive quarters. That’s a record even compared to pre-pandemic activity, according to a Corcoran report. In July, the spotlight was strongly fixed on historic townhouses. Week after week, historic townhomes topped Brooklyn’s list of most expensive signed contracts. The third week of the month was marked by a notable shortage of activity, except that nine of the most expensive properties to find buyers were all townhouses.
The allure of historic townhouses is drawing attention to Cobble Hill and Carroll Gardens, which were the second quarter’s priciest Brooklyn neighborhoods. Offering both historic brownstones and new developments, the average sales price in Cobble Hill jumped 27 percent compared to the second quarter of last year, and Carrol Gardens jumped higher still, increasing 31 percent.
In Westchester, a Georgian home with ties to old Hollywood is now available. With a current asking price of $11 million, the mansion served as a film set for several scenes in 1954’s “Sabrina” starring Audrey Hepburn and Humphrey Bogart. It’s the area’s largest waterfront parcel with nearly six acres encompassing the seven-bed main house, guest cottage, detached garage, and private beach.
The second-quarter results in Westchester were a mix of rising prices with the introduction of sliding sales as mortgage rates jumped. While listing inventory fell year over year to the lowest second-quarter total in 27 years and down 14.5% from last year, the quarter-over-quarter increase of 31.4% was the largest in fourteen years. While listing inventory gains are seasonally expected to rise from the first to second quarters, the 31.4% increase was the highest seen since 2004. Before the quarter, the restraint on sales was mainly attributable to the collapse of supply. However, the near doubling of mortgage rates since the end of 2021 has slowed the market during the quarter.
Miami may have just topped the list of least affordable U.S. housing markets based on median household income, but the luxury market wasn’t fazed. Miami Beach’s housing boom continued last month when investor Laurent Groll flipped a waterfront Hibiscus Island property for $14 million. He purchased it just one month earlier for $10.7 million.
In Miami Beach, single family median sales price surged 70.3% annually to $3,500,000, a new record for the seventh time in eight quarters and more than double pre-pandemic levels. Condo median sales prices slipped 2.8% to the third-highest on record and was 50% above pre-pandemic levels.
In the year since the deadly condo collapse in Surfside, special assessments to pay for restoration and renovation work are becoming more and more common. Most recently, Murano at Portofino and Murano Grande, both condo towers developed in the early 2000s, are beginning projects that have been in discussion for years.