Feeling sluggish from this summer heatwave? You’re not alone. The housing market is right there with you. Across the country, housing sales activity slowed throughout August, continuing what many analysts have dubbed a “summer slump.” But we’re not discouraged by industry news, and you shouldn’t be either. Especially in major metropolises, where what’s in the news is often disconnected from what we see with our boots on the ground. Despite slowing activity, the markets E|A is based in – NYC, Westchester, and Miami – are all thriving, albeit at a much healthier pace than prior months. Here at E|A, the number of listings, pitches, and projects we are working on is on track to be our most active post Labor Day year-end stretch in our 13-year partnership.
Across these markets, the number of transactions decreased but prices didn’t. Even with multiple rate increases making it more expensive to borrow, we have yet to see any significant value erosion. Sellers have also been cautious about listing their homes, so depleted inventories have yet to rise. The real sentiment of the summer slump seems to be “I’m going to head to my summer house to check-out and let things unfold… See you in September.”
The one market not experiencing a lack of inventory, according to Miller Samuel for Douglas Elliman, is Manhattan. Despite new condos going on the market declining about 10 percent since 2021, unsold listings from previous months are keeping the borough ripe with options. Condo conversions faded out of style around 2019 though, so any excess inventory in Manhattan may not last long. In fact, developers are pulling back for myriad reasons – from rising costs to supply shortages – and the next few years are expected to see stronger alignment in the borough between supply in demand.
Brooklyn’s activity followed suit. Newly signed contracts dropped 26 percent for co-ops and 46 percent for condos. By the end of August, homes asking $2 million or more went into contract with a larger average discount than at any other point this year. However, the borough showed resilience in the face of rising interest rates, inflation, and limited supply with an 8.7 percent growth in sales year over year across all types of properties. Brooklyn Heights and Cobble Hill townhouses continue to be the top drivers of activity.
Outside the city, Westchester’s “slump” was just a 26 percent decline in newly signed contracts for single-family homes and a 20 percent dip in new listing inventory. We’ve seen firsthand that the market here remains hot however, we listed 61 Old Logging Road in Pound Ridge on August 21st and had a fully executed contract by August 25th. Same goes for our newest Briarcliff Manor listing, 178 Schrade Road, which launched to market last week on Friday and where viewing activity is robust.
Miami activity continued to tumble from July throughout August. In the third week of August, sale prices ranged from $1.3 million to $4.2 million, compared to $1.8 million to $7.2 million the previous week. But don’t be misled by this data, the concentration of wealth in Miami and Palm Beach now rivals that of NYC and Los Angeles because of what we call the “great financial exile migration.” Trends show that major financial institutions and ultra-high net worth individuals have been relocating their HQ’s and primary residences to South Florida, because of the absence of state and city income taxes.
In the end, this is all to say that while we have had a much quieter summer than last year, it has been a relief not a scare. At this time in 2021 we were in our seventh month of record-breaking activity. By comparison, 2022 was statistically a cliff dive. In reality, it’s just a well-earned reprieve for sellers, buyers, and agents alike to take a vacation and recharge.
Here we go!