4. Pending closings were down 30+% at points in the Fall, but over the last few weeks pending listings in most major markets are flat year-over-year.

Since the start of the new year, NYC has also seen a notable uptick in buyer activity. In addition to increased mortgage applications, open house attendance is up markedly. Compass agent open house surveys throughout November and December showed Manhattan open houses receiving 1.09-1.51 buyers on average, with more than 35% getting zero visitors. Since the start of the new year average weekly attendance has ticked up to 2.24-2.46 visitors, and the percent of open houses with zero visitors has dropped below 15% for the last three weekends. Brown Harris Stevens' open house survey reports similar results with average Manhattan visitors at 2.03-2.53 visitors weekly on average since January 18 versus 0.96-1.21 in October and November. 

Pending sales -- or "in contract" listings in NYC parlance -- have not recovered in NYC to the same extent as in other markets, on paper.  In Manhattan, versus many other markets, it takes on 7-20 days from the time an offer is accepted for a contract to be signed. Due diligence often takes up the lion's share of this time, and is not a factor in many other markets. Given this lengthy time to contract, we wouldn't expect January activity to be fully reflected in January contract figures but would expect a bump in February.

Closed sale prices were down in January reflecting market volatility caused by lower transaction volume. As we noted in our Fall newsletters, inventory was way down in the Fall as many sellers opted to wait out what was viewed as a blip in the market. While special properties traded at or above what they would have in a strong market, other properties did not fare as well bringing down overall metrics. However, it is important to note that we are talking about a small number of "deals" on these properties, versus historical prior downturns where supply remained high causing widespread contraction in prices.

As we’ve come to expect, Brooklyn was overall less affected by rising rates in the Fall, and since the start of the new year has seen an even faster uptick in activity than Manhattan. In addition to significantly higher open house traffic - 4+ visitors on average based on all Compass agent open house surveys since the start of the year - January contract activity, while nowhere near the manic levels we saw in January 2021 and 2022, were slightly higher than in January 2020, indicating Brooklyn market activity is still in line with pre-pandemic norms. 

Inventory in Brooklyn remains constrained, especially in certain areas, with ~31% fewer new listings entering the market this January than last. January closed sale price metrics in Brooklyn all saw year-over-year increases, unlike in Manhattan, indicating that while fewer deals were done in the final quarter of 2022, prices in Brooklyn have not softened. As rates continue to improve we expect buyer demand to increase, with fast paced absorption and multiple offers on certain property types remaining hallmarks of the Brooklyn market in 2023. 

The Fed unanimously approved a quarter-point interest rate hike on Wednesday, slowing the pace of its increases in a clear sign that the central bank is seeing progress in its battle with inflation. The decision comes after months of jumbo-sized rate increases intended to cool the economy, and marks the return to a more traditional interest-rate policy. 

(REAL DEAL)

"Days on market" -- the number of days, weeks, months, or even years a listing has been for sale -- is not a straightforward metric and its effect on pricing and negotiations is more nuanced than one might think.

With mortgage rates at their lowest point since September, mortgage application volume jumped nearly 28% compared the week of January 18.