September 2023 Newsletter

September 2023 

September Newsletter —

Labor Day is over and real estate activity is ramping up. In this month's newsletter, we cover the monthly market update, proposed changes to rental fees, and more.

Market Update

According to graphics reporter Aziz Sunderji, the short and volatile housing cycle, which began in 2020, came to a close at the beginning of this summer. However, predictions for the housing market are still largely dependent on two closely intertwined variables: inflation and the Fed. How much additional uncertainty we experience and the direction of the market through the end of 2023 will be determined by whether or not interest rates are increased once again; the Fed next meets September 19th and 20th.

New York City's real estate market hasn't seen much change in the past month, which can be attributed to the standard late summer lull. The trends we saw in Q2, particularly with regard to cash deals, have carried into Q3. Curbed has named this an "all-cash summer," as buyers continue to eschew high-rate loans, and sellers repeatedly favor cash offers in bidding wars. We probably won't see complete statistics until the end-of-quarter reports, but the shift and its cause are both clear.

Meanwhile, average and median sales prices in Brooklyn and Manhattan are up, but there's more to the overall numbers than meets the eye. For instance, in Manhattan, the more than 10% month-over-month rise is almost entirely driven by co-ops; condos are only up between 1-3% (depending on whether you're looking at average or median prices). Even within co-ops, the average price has increased 11.6% month-over-month, while the median price has only increased 5.3%. In Brooklyn, where the overall month-over-month change is smaller (between 2-4%), the majority of the change is coming from condos (an increase between 8-13%). In fact, co-op prices in Brooklyn are actually down (between 1-7%), but that hasn't stopped the Brooklyn housing market from seeing a record numbers of attendees at open houses.

Let's take a closer look at sales trends in both boroughs.

Manhattan Snapshot

Median Sale Price

+11.4%
Month-Over-Month

+4%
Year-Over-Year

Contracts Signed

+0.6%
Month-Over-Month

-7.7%
Year-Over-Year

Average Days on Market

+2.4%
Month-Over-Month

+27.8%
Year-Over-Year

Inventory

-4.1%
Month-Over-Month

-7.9%
Year-Over-Year

Graph comparing market share of Manhattan sales by price.
Source: Compass

Brooklyn Snapshot

Median Sale Price

+2%
Month-Over-Month

+1.6%
Year-Over-Year

Contracts Signed

-7.3%
Month-Over-Month

-16.5%
Year-Over-Year

Average Days on Market

+1.7%
Month-Over-Month

+19.6%
Year-Over-Year

Inventory

-0.7%
Month-Over-Month

-8.5%
Year-Over-Year

Graph comparing market share of Brooklyn sales by price.
Source: Compass

August Market Report - Manhattan

August Market Report - Brooklyn

In the News

The Real Estate Board of New York (REBNY) is opposing proposed legislation put forth by City Council Member Chi Ossé, which seeks to implement significant changes to broker fees in New York City. This legislation's primary aim is to restrict renters from paying broker fees unless they explicitly hire an agent or broker. Currently, tenants are often responsible for paying the broker fee for both their own agent, should they choose to work with one, and for the landlord's agent.

REBNY is voicing concerns that this bill would have adverse consequences for both renters and the overall rental market. They assert that making all apartments "no fee" listings could lead to higher overall rents, as landlords would pass the broker fee cost to renters by increasing the base rent. For instance, an apartment asking $4,000 per month with the brokerage fee paid by the tenant means the tenant would pay $4,000 per month in rent with an upfront brokerage fee of approximately $7,200. Under the proposed legislation, the tenant would avoid paying the upfront broker fee, however, the landlord may then increase the rent to $4,600, which would be the new base rent. In this scenario, the increase in the second year of the lease is based on the higher rent of $4,600.

Another concern raised by REBNY is the potential for reduced transparency in the rental market. The legislation could lead to a return to a less transparent environment reminiscent of the 1990s. During that time, detailed listing information and addresses were not readily available online, and renters often had to hire brokers just to access basic apartment information. This lack of transparency could especially affect New Yorkers relying on housing vouchers, as they may have reduced access to essential information needed to secure an apartment.

While the proposed legislation may appear beneficial at first glance, REBNY asserts that its unintended consequences could lead to higher rents, reduced transparency, and potential harm to renters in the New York City housing market. Instead, they advocate for alternative measures aimed at increasing affordable housing and enhancing the home search process.

Douglas Wagner of Bond New York published an op-ed in Daily News to highlight why this legislation will harm consumers, which you can read with the link below.

Read More Here

City Spotlight: West Side Fest

Join the inaugural West Side Fest on Saturday, September 30, for a free day of cultural experiences. Hosted by The West Side Cultural Network, this event offers free museum admission, live performances, art activities, and more. It celebrates the dynamic cultural hub of the Hudson River's West Side and is the result of four years of neighborhood collaboration, bringing together arts organizations, parks, and performance centers to promote creativity, conversation, and economic progress in the area. Don't miss the chance to experience the best of the West Side!

You can find the full schedule of events and a map here.

In Contract Above Ask In Under 35 Days

Upper East Side

38 East 85th Street, Unit 7E

2 BD   2 BA   1,200 SF   $1,595,000

This listing is in contract above the asking price after only 34 days on the market. According to data from StreetEasy, 135 is the median number of days it takes similar homes to go into contract. 

Through expertly positioning and marketing the apartment, Unit 7E experienced greater overall activity and inquiries than similar listings. See how online activity for 7E compares to similar listings, according to these statistics from StreetEasy.

Most Recent Mortgage Rates

Rates are from Citibank and are effective as of 09/11/2023. Rates are subject to change without notice.

Everyone’s mortgage needs are different. I have great relationships with mortgage brokers and loan officers from big banks and small banks who can help find the best loan for you. If you're looking for a lender you can trust, I'd love to help. Email me for more.

Rebecca's Resources

I'm an expert at successfully repositioning and selling homes that were previously listed. Click here for examples of how I have transformed listings to showcase a property's full potential, securing favorable deals where other agents could not. 

Find out how Compass Concierge can help you prepare your home before coming to market by fronting the costs of upgrading, renovating, and staging at no interest.

I'm born and raised in New York City. If you've got a question, I've got you covered. For recommendations on anything, from the best park for picnics to how much to tip your building staff, it's as simple as sending me an email.

Licensed Associate Real Estate Broker
M: 917.952.0414
rebecca.orbach@compass.com

Office: 212-913-9058

Compass is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. All Coming Soon listings in NYC are simultaneously syndicated to the REBNY RLS. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.