Hard to believe we are in the second half of 2022. We are back to a seasonal pattern of activity. The summer market is here as indicators point to decreased new-deals-to-market supply and lower contract volume.
We believe quite strongly that there are deals to be done if sellers price their properties appropriately. Price well and buyers will come.
As always, we recommend having a conversation with us if you are contemplating a real estate transaction soon.
Let’s look at where the first half of 2022 landed. Additional detail is available in the 2Q2022 Manhattan Market Report. The market peaked midway through the first half of 2022. The time it took to sign a deal fell to record low levels. Sellers were getting 97% of their asking price.
The real estate market is now returning to normal seasonal levels after the six (6) month Covid market disruption and the sixteen (16) month recovery demonstrated by explosive deal volume through the first half of 2022.
DATA COURTESY OF URBANDIGS.COM
The negative wealth effect of the volatile stock market, consumer inflation in the US, and rising interest rates has given both buyers and sellers much to consider as they approach the real estate market. All of these factors have come together resulting in both supply and demand declining.
Declining supply is shown by actively listed inventory numbers. As shown in the chart below, available inventory units are below 2019 levels. When compared to prior years (excluding 2020 due to Covid), trends in Manhattan and Brooklyn are experiencing the normal summer / holiday slowdown.
Manhattan:
DATA COURTESY OF URBANDIGS.COM
Brooklyn:
DATA COURTESY OF URBANDIGS.COM
The real estate market demand is pending sales driven by contracts signed. Again, these trends are also returning to normal territory after explosive deal volume of 2021 into early 2022.
Manhattan:
DATA COURTESY OF URBANDIGS.COM
Brooklyn:
DATA COURTESY OF URBANDIGS.COM
We will be watching numbers closely to see where supply and demand numbers are heading after the summer slowdown through Labor Day. As demonstrated by the first chart (Manhattan Contracts Signed Year-Over-Year), deal volume comparisons are going to be tough given the stratospheric recovery numbers in 2021. Deal volume is still hanging in and inventory remains at reasonable levels. Pricing appropriately will be key for sellers in the coming months as buyers carefully consider their options and make decisions.
As always, please email or call with any questions. In the meantime, enjoy your summer and be safe.
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