January 2024 Newsletter

January 2024

January Newsletter —

Happy New Year to you and yours! In this month's newsletter, we cover the Q4 2023 market update, check in with real estate news, and more.

Market Update

Welcome to 2024, a year that begins with the knowledge that the Fed will no longer be raising interest rates. The announcement came December 14th, and, since then average 30-year mortgage rates have dropped to 7%—a welcome change from the 23-year record-high in October of almost 8%. With the potential for incremental cuts on the horizon, there's reason to be cautiously optimistic about the coming year in real estate. The National Association of Realtors (NAR) predicts mortgage rates will average around 6.3% during 2024. 

2023 was a year of watching and waiting, thanks in no small part to the Fed and a guessing game of whether interest rates would continue to rise. New York City was no exception, with a spike of all-cash deals to avoid mortgage rates entirely and low inventory as potential sellers stayed in place to avoid losing their pre-pandemic mortgage rates. In fact, the all-time-high median asking price for Manhattan of $1.1M in 2023 was less a reflection of true pricing changes across the market and more likely the result of deals happening more often in the luxury market, where buyers could afford the liquidity to pay in cash. This probably isn't going to change much any time soon, but market adjustments will come; they just may come slowly.

The rental market is seeing a small uptick in inventory thanks to the new short-term rental rules, which have pushed many owners to become landlords rather than Airbnb hosts, and with the winter rental season always a little slower, savvy renters may be able to negotiate a deal. Inventory is still well below pre-pandemic levels, however. The real relief from the continued record pricing will likely keep pace just behind the sales market, as any motion to put potential buyers into owned homes instead of rental properties will create more inventory for the city's tenants.

The Q4 2023 sales numbers in Manhattan fit the narrative of 2023's markets and 2024's forecasts. Closed sales fell 10.2% year-over-year, but what did sell hit price points that haven't been seen since 2018. 40% of potential resalers sat tight to preserve their mortgage rates, while properties over $5M saw an increase of nearly 30% year-over-year. The final quarter of 2023 left us with the early signs of market shift in Manhattan, though—a 7.6% increase in contracts signed year-over-year.

In Brooklyn, Q4 2023 saw the borough's inventory dropping below 3,000 active properties for the first time since 2014. It's no surprise then that last asking prices increased—5% for average price and 10.9% for median. Still, the 3.5% decrease quarter-over-quarter and the 3.7% decrease in contracts signed year-over-year align with pre-pandemic trends. A return to typical seasonal market shifts is a welcome change after the last several years. 

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

Manhattan Snapshot

Median Recorded Sales Price

+4.9%
Quarter-Over-Quarter

+7.3%
Year-Over-Year

Contracts Signed

+5.1%
Quarter-Over-Quarter

+7.6%
Year-Over-Year

Recorded Sales

-16.7%
Quarter-Over-Quarter

-10.2%
Year-Over-Year

Inventory

-13.1%
Quarter-Over-Quarter

+1.6%
Year-Over-Year

Source: Compass Q4 2023 Manhattan Market Report

Brooklyn Snapshot

Median Recorded Sales Price

+2.3%
Quarter-Over-Quarter

+1.8%
Year-Over-Year

Contracts Signed

-3.5%
Quarter-Over-Quarter

-3.7%
Year-Over-Year

Recorded Sales

-12.4%
Quarter-Over-Quarter

-20.7%
Year-Over-Year

Inventory

-32.1%
Quarter-Over-Quarter

-14.6%
Year-Over-Year

Source: Compass Q4 2023 Brooklyn Market Report

Q4 2023 Market Report - Manhattan

Q4 2023 Market Report - Brooklyn

Deep Dive: Hochul's Housing Plan

How do you solve a housing crisis? Slowly, as it turns out. Despite Governor Hochul's push last year to build more homes in the suburbs around New York City, legislators in Albany left the 2023 session without making any major moves. The only tangible movement toward creating more affordable housing, or at least opening up the existing inventory, came from Local Law 18's short-term rental restrictions. 

The causes of the housing crisis are manyfold, and we discussed several of them above in our Market Update. In addition to NYC's economic and interest rate-driven situations, there are also several more systemic problems at play. The expiration of the 421a tax abatement, for instance, has led to a slowdown in new apartment construction. The strained pocketbooks of lower income renters are no match for soaring rents, and buses of migrants and asylum seekers have overwhelmed the city's services and shelters for the unhoused. 

Massachusetts and California both made strong policy changes toward affordable (and available) housing through long-fought-for and carefully-constructed coalitions across parties, interest groups, and advocacy organizations. Critics suggest that Hochul and other New York legislators tried to make big moves without that big backing. It's looking like the 2024 session in Albany may be more successful, though, or at least more willing to find compromise.

Here's a look at Governor Hochul's proposals for 2024:

- A replacement for the 421a program that would incentivize construction of new and affordable housing
- Encouraging converting offices into affordable housing
- Lifting the cap on floor area ratio restrictions (currently at 12.0) within NYC
- A $500M capital fund to support the use of select state-owned properties for building (or converting existing infrastructure into) new housing
- Strengthening the Pro-Housing Communities Program by tying participation in maximizing housing options and streamlining permitting systems to localities receiving a priority for state discretionary funds for other programs
- A special enforcement unit responsible for cracking down on discrimination based on housing assistance and clearing the queue of complaints to get families into homes faster
- Streamlining the affordable housing search process to make it faster, easier, and more efficient for anyone applying for affordable housing
- A state law prohibiting residential real property insurers from inquiring about or raising premiums based on sources of income, affordable dwelling units, or government assistance

Read More Here

City Spotlight: Frick Madison

If you haven't visited Frick Madison, you only have until March 3rd to get there!

The Frick's temporary home on Madison Avenue, while the main museum on 70th Street undergoes historic renovations, could have been just a slightly different version of The Frick. Instead, curators created an entirely new way to experience your favorite masterpieces. According to The New York Times, it's “No barriers. No texts. No heavy gold fabric...It’s just you and the masters.”

Located at 945 Madison Avenue on 75th Street, in the previous home of the Whitney and the Met Breuer, you can get up close and personal with paintings and sculptures by Bellini, Clodion, Gainsborough, Goya, Holbein, Houdon, Ingres, Piero della Francesca, Rembrandt, Titian, Turner, Velázquez, Vermeer, Whistler, and more.

You can find more information here.

Recently Closed

Lenox Hill

515 East 72nd Street, Unit 12D

1 BD   1.5 BA   927 SF   $1,075,000

Coming Soon

One-Bedroom with Home Office off Park Avenue

Just off Park Avenue and 86th Street, this renovated one-bedroom sanctuary offers beautiful prewar charm with 9' beamed ceilings and herringbone floors. Washer/dryer permitted and storage included! 

Contact me for details or to see it first!

Most Recent Mortgage Rates

Rates are from Citibank and are effective as of 01/12/2024. 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 fine art movers to the best neighborhood for you, 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.