October 2024

October Newsletter —

As the leaves begin to change and the crisp air of October settles in, the real estate market is showing signs of vibrant activity. In this month's newsletter, we dive into the Q3 2024 market report, discuss the latest real estate trends, and more.

Sales Market Update

In the third quarter, the residential real estate market in Manhattan demonstrated resilience. Despite the anticipation of declining mortgage rates causing some buyers to hesitate earlier in the quarter, the market rebounded as mortgage rates dropped to their lowest in 1.5 years. This reduction spurred more buyer activity, setting the stage for a robust year-end.

Closed sales slightly declined to 2,694 transactions, down by 1.8% from Q3 2023, reflecting a typical slowdown before a presidential election and expectations of further mortgage rate reductions. As mortgage rates began to decrease, there was a noticeable uptick in contract activity and open house attendance, although the levels did not meet expectations. The number of contracts signed this quarter decreased by 1.8% year-over-year and was 27.6% lower than in the second quarter.

The luxury market emerged as a highlight this quarter. Despite a scarcity of inventory, the high-end segment saw strong performance, driven by gains in the stock market and sustained interest in luxury new developments. Contracts for homes priced between $10 million and $20 million grew by 15.4% year-over-year, and those over $20 million increased by an impressive 16.7%.

The market also saw a slight quarter-over-quarter inventory decrease of 0.3%, highlighting the persistent challenge of limited supply. Compared to last year, new listings were down 15.4%, and there was a significant 39.1% reduction from the previous quarter. This shortage continued to drive prices up, with the median price climbing 13.6% compared to Q3 2023.

Overall, with lower mortgage rates, pent-up demand, and renewed buyer confidence, Manhattan's real estate market is positioned for positive momentum as we move into the fall and beyond, reinforcing its status as a premier global destination.

Brooklyn’s residential real estate market is experiencing a notable transformation. This quarter saw 2,555 sales, marking a 4.3% increase from last year and a 1.9% rise from the previous quarter. There was a significant shift in the types of properties sold: while transactions for condos priced at $1 million and above rose, sales for those under $500,000 declined by 14.6% year-over-year. Co-ops decreased by 4.1% compared to last year, whereas condos and houses saw gains of 7.9% and 5.7%, respectively.

Inventory dynamics also reflect significant changes, with an overall 5.4% decrease from last year but an 11.2% increase from the last quarter. Condos were the only category to experience a year-over-year inventory increase, up by 6.8%. In contrast, co-ops and houses faced declines, highlighting ongoing competitiveness in Brooklyn’s market.

Contract activity varied significantly across property types. Co-ops saw a dramatic 47% drop in contracts signed compared to last year, attributed to limited availability, which also drove up prices. Meanwhile, condos and houses enjoyed double-digit increases in contract signings, with more modest price increases.

Overall, Brooklyn's market adjustments are characterized by evolving buyer preferences and a competitive landscape. The robust condo market in Northwest Brooklyn and the declining interest in lower-priced homes highlight shifting consumer priorities. As the market continues to adapt, it's essential for stakeholders to stay alert to these trends, which will likely influence future opportunities and developments within the borough.

The recovery and increased activity in both Manhattan and Brooklyn, driven by lower mortgage rates and favorable economic conditions, point to sustained market resilience. These boroughs continue to attract a wide range of buyers, buoyed by the relatively competitive market conditions and evolving consumer preferences. As we move into Q4, the trends observed in Q3 2024 suggest a strong foundation for continued robust activity in the New York City real estate market.

-3.1%

Quarter-Over-Quarter

+2.2%

Year-Over-Year

-27.6%

Quarter-Over-Quarter

-1.8%

Year-Over-Year

Days on Market

188

Average Days on Market

30%

Properties with 180+ DOM Pre-Contract

Inventory

-0.3%

Quarter-Over-Quarter

-6.6%

Year-Over-Year

Source: Compass Q3 2024 Manhattan Market Report

-6.5%

Condos

+11.8%

Co-ops

+9.1%

Houses

Contracts Signed (QOQ)

-8.4%

Condos

-57.9%

Co-ops

-14.4%

Houses

Overall Days on Market

125

Average Days on Market

17%

Properties with 180+ DOM Pre-Contract

Inventory (QOQ)

+17.8%

Condos

-0.6%

Co-ops

+11.7%

Houses

Source: Compass Q3 2024 Brooklyn Market Report

Rental Market Update

As we enter fall, the NYC rental market shows signs of cooling, influenced by both the end of summer—the busiest and most competitive rental season—and falling mortgage rates that started to decrease in late July. These factors encouraged some renters to consider homeownership, thus slightly easing the rental demand. Despite this shift, prices remain elevated compared to last year.

In September 2024, Manhattan’s average rent for studio to three-bedroom units was $5,630, nearly unchanged from August’s $5,636, but still reflecting a 5% increase year-over-year from $5,366 in September 2023. The inventory also rose significantly, with 3,384 units listed, marking a 31% increase compared to the 2,586 units listed a year ago. This growing inventory may be helping to stabilize the market, offering some relief to renters who faced rapid price increases last year.

In Brooklyn, the average rent decreased slightly month-over-month to $4,220 in September 2024 from $4,231 in August, while year-over-year, it showed a modest increase of 1% from $4,190 in September 2023. The borough's rental inventory surged, with 1,517 units listed in September 2024, a 67% increase from the previous year, providing more options for prospective renters and potentially tempering further rent increases.

Overall, while rental prices have stabilized month-over-month, they remain higher compared to last year. The increased inventory across Manhattan, Brooklyn, and Queens may signal a shift towards a more balanced market, but with rents still at historic highs, significant relief for renters is not yet on the horizon. The interplay between mortgage rates and rental demand will be crucial in shaping the market dynamics as we continue into the fall.

Read the Compass September 2024 Rental Report here.

Deep Dive: The Election

As the 2024 U.S. presidential election approaches, the potential impact of a Trump or Harris presidency on the luxury real estate market is drawing considerable attention from industry experts. Both candidates offer starkly different economic policies, yet how these might directly influence the high-end property sector remains a complex and debated topic. The focus on both candidates' intentions regarding public land development, tariffs, and taxes could significantly influence the market's dynamics over the next four years.

Policy Implications and Market Dynamics Donald Trump and Kamala Harris have proposed opening federal lands to development as part of broader efforts to address the housing shortage and affordability crisis. The federal government owns approximately 28% of the land in the U.S., totaling more than 615 million acres, including significant portions of Nevada and Utah. However, as Lance Lambert, housing journalist and editor in chief of housing newsletter ResiClub points out, only a small fraction of this land is suitable for development, often covering areas like deserts, mountains, and remote wilderness. While the primary intent is to increase the housing stock broadly, the potential release of these lands could inadvertently create unique opportunities for luxury real estate development in remote and scenic locations that appeal to affluent buyers seeking privacy and exclusivity. Ralph McLaughlin, a senior economist at Realtor.com, notes that without specific stipulations on land use, homebuilders might target these areas near national parks and other desirable locations to develop high-end residential projects.

Economic Outlook and Investor Sentiment According to a recent UBS Investor Watch report, there is a notable optimism among wealthy investors regarding the economic outlook, which surpasses the sentiment before the last presidential election. This optimism is crucial, as it underpins the confidence in luxury real estate investments. Despite potential policy changes, the economic environment, characterized by recent interest rate cuts and a stable rate cycle, seems to bolster the luxury market.

"The performance of luxury real estate is often less about the immediate impact of policies and more about the overall economic climate," says Jason Katz, a senior portfolio adviser at UBS. "Right now, we're seeing an environment where, despite potential upheavals from the election, the fundamentals that support strong luxury market performance remain intact."

Market Trends and Predictions Real estate markets continue to show robust growth in prices, with the median home price in the U.S. in August reaching $432,961, a 3% increase from the previous year. However, the volume of homes sold has slightly decreased, which could suggest a more cautious approach from buyers, likely influenced by broader economic factors rather than immediate policy fears.

Industry experts emphasize the importance of viewing presidential policies within the broader context of state and local regulations, which have a more direct impact on housing markets. "Presidential rhetoric around housing often focuses on transformative changes, but the reality is that housing policies are primarily enacted at the local level," says Ralph McLaughlin.

Long-term Market Considerations Regardless of who wins the presidency, the strategies laid out during their campaigns suggest a continued focus on enhancing the housing stock and addressing affordability. However, the luxury sector operates somewhat independently, driven by factors that extend beyond typical market dynamics, such as the desirability of specific locations and the unique preferences of affluent buyers.

Looking forward, the luxury real estate market appears poised to continue its trajectory of growth, moderated by larger economic indicators rather than immediate policy shifts. The ongoing interest in high-end properties, supported by a backdrop of favorable mortgage rates and a stable financial market, suggests that luxury real estate will remain a resilient segment in the broader housing market.

As the election draws nearer, stakeholders in the luxury real estate market would do well to monitor both the economic indicators and the nuanced policy discussions that could shape the sector's future. While the immediate effects of presidential policies might be limited, the broader economic policies and market sentiments will likely play a more significant role in shaping the landscape of luxury real estate in the coming years.

City Spotlight: Pumpkin Nights

This fall, the Bronx Zoo is bringing back its luminous Pumpkin Nights for a second year, following its successful debut in 2023. More than 5,000 animal-themed jack-o'-lanterns will light up the zoo, arranged in spectacular displays representing various animal ecosystems—from the Amazon rainforest to the Himalayas and the bioluminescent deep sea. The event, running from September 26 through October 27, promises an immersive half-mile trail adorned with atmospheric sounds, music, costumed characters, and dynamic lighting effects, enhancing the festive ambiance.

Click here for more information.

In Contract

Upper East Side

1049 Park Avenue, Unit 6B

3 BD 2 BA 1,550 SF $1,250,000

This stunning 1,550 square foot home offers 9' 5" ceilings, original moldings, and tons of prewar charm, all in a prime Park Avenue location.

Upper West Side

150 West End Avenue, Unit 21H

1 BD 1 BA 900 SF $799,000

This spacious home is bright and offers stunning views of the building's garden. Set in an ideallocation on West 66th Street, this home is proximate to tons of dining options, transportation, and cultural institions.

Lenox Hill

400 East 70th Street #3003

2 BD 2 BA 1,150 SF $1,999,000

Perched on the 30th floor with breathtaking views from three different exposures, this expansive home has been fully renovated, and not a single detail has been overlooked. Enjoy 75 square feet of private outdoor space, an open chef’s kitchen with top-of-the-line appliances and a large island, and laundry just down the hall, all in a full-service condo.

Lenox Hill

174 East 74th Street, Unit 10G

2 BD 1 BA 850 SF $799,000

With approximately 850 square feet of living space, this inviting home boasts east-facing windows that bathe the interior in sunshine throughout the day, offers abundant closet space, the ability to install a washer/dryer, and an incredibly low-maintenance, all in a full-service coop ideally positioned west of Third Avenue.

Kips Bay

251 East 32nd Street, Unit 5J

1 BD 1 BA 775 SF $599,000

This recently renovated home is sunny, spacious, remarkably quiet, and boasts ample closet and storage space. Featuring wide-plank white oak floors and charming views of townhouse gardens through expansive windows, the apartment exudes a bright and cheerful atmosphere.

Just Sold

Upper East Side

440 East 79th Street, Unit 14G

1 BD 1 BA 750 SF $599,000

This well thought out apartment has been optimized with its thoughtful open kitchen and bar-stool countertop seating arrangement. The apartment begins with a pleasant entry foyer comprised of 3 closets in total including: coat, storage, and pantry (storage closet is a semi walk-in with organizers and shelving). The open kitchen features white cabinetry, sleek black quartz countertops, and full-size stainless steel appliances.

Just Listed

Astoria

21-21 31st Street,

Unit 5C

1 BD 1 BA 702 SF $3,900

Offered furnished or unfurnished.

This newly constructed southeast-facing one-bedroom features oversized windows that fill the home with natural light all day long. With high ceilings, an in-unit washer/dryer, and a private balcony, this residence offers modern comfort and style. Situated in the heart of Astoria, The Rowan is just steps from great restaurants and major transportation.

East Village

645 East 11th Street, Unit 1

Located in the East Village, this retail condo was formerly a dental office. There are three exam rooms and two street entrances.

Off-Market

Rental Buildings in Prime Locations

Four rental buildings available off-market, offered individually or as a package. Located on the Upper East Side, Upper West Side, and Gramercy, these properties feature a mix of rent-stabilized and free-market units, with all buildings fully occupied. Each building contains between 6 and 17 units. For more information, please contact me.

Lower East Side

265 East Houston Street, Unit 7

2 BD 2 BA 1,400 SF $9,995

Available short term (three months minimum) or long term, furnished, unfurnished, or partially furnished.

Ideally located in the heart of the Lower East Side, this expansive seventh-floor loft-style home offers unparalleled luxury living. Boasting exclusive elevator access and a private balcony, this residence features an array of modern amenities, including an in-unit washer/dryer.

Coming Soon

Two-Bedroom on 92nd St between

Central Park West & Columbus

This fully renovated two-bedroom home is ideally located just steps from Central Park. Bright and airy with three exposures and windows in every room, this home boasts charming details like exposed brick and a decorative fireplace, as well as the modern conveniences of an in-unit washer dryer and an open chef’s kitchen with high-end appliances.

For more information, please contact me.

Upper east side

Pre-War One-Bedroom

This charming prewar one-bedroom is quiet, with windows in every room and access to a range of building amenities, including a common courtyard, laundry facilities, bike storage, and a children’s playroom. Situated on 88th Street and Second Avenue, this residence offers convenient access to the 4/5/6 and Q trains, as well as the 86th Street crosstown bus.

Contact me for details.

NoMad

88 Lexington Avenue

2 BD 2.5 BA 1,541 SF $12,500/month

This luxurious east-facing split two-bedroom, two-and-a-half-bathroom home features oversized windows with open views, ceilings over 10 feet high, an in-unit washer/dryer, a separate office area, and central AC, all a building with more than 10,000 square feet of amenities.

Contact me for details.

Most Recent Mortgage Rates

Rates are from Citibank and are effective as of 10/15/2024. 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 without success. 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 nearby hiking trails to the best spots for viewing fall foliage, it's as simple as sending me an email.

Licensed Associate Real Estate Broker

M: 917.952.0414

rebecca.orbach@compass.com