March 2024 Newsletter

March 2024

March Newsletter —

We've made it through winter, and in just a few days, we can look forward to an extra hour of daylight and the promise of spring. In this month's newsletter, we take a look at the February 2024 market, delve into NYC's mandate to install natural gas, and more.

Market Update

The theme of the New York City real estate market in February 2024 was "subtle but hopeful." After four years of the market pendulum swinging in wide, wild arcs between buyers market and sellers market extremes, it looks like we're on our way to a version of familiar equilibrium. 

The data may seem daunting at first glance—we have high median asking prices, high monthly mortgages, more days on the market on average, and cautious buyers—but the incremental month-over-month activity since the Fed paused its interest rate hikes has many market-savvy people poised for action.

In some ways, the data can also be a little deceiving. For instance, the high median asking price and the increased average days on the market are inextricably linked. The properties that have been sitting on the market the longest, thereby driving up the average days on market, are also the properties with asking prices still set stubbornly above market value. This is skewing the median and average numbers upward in a way that does not reflect the more active portions of the market. Those trends paint a more positive picture and will continue to do so. Eventually, the data will catch up.

Many of those skewing numbers are coming from the luxury market, where the sale-to-list price ratios are showing an increase in seller concessions. If you're a buyer, this is a great time to look at higher end properties.

In Manhattan, the median asking price for luxury properties rose 8.4% between January 2023 and January 2024, but sellers are typically only getting 93.2% of those asking prices. That's a continuation of its downward trajectory from 94.9% in December 2023, 95.8% in December 2022, and 96.2% in December 2021. This is in contrast to the overall median asking price, which actually fell slightly year-over-year for February. 

In Brooklyn, the median asking price of luxury properties is 16.8% higher year-over-year (January 2023 to January 2024) thanks to the ongoing trend of limited inventory, but it's still almost $700,000 lower than Manhattan's. The overall median price for Brooklyn properties increased 10.7% year-over-year (February 2023 to February 2024), but the average days on market increased a whopping 36.1%.

The rental market, meanwhile, is still highly competitive. Year-over-year, Manhattan and Brooklyn rents are up and inventory is down across the board—sometimes by 10% or more. According to StreetEasy's rental data, the average New Yorker can now expect to spend upwards of $10,000 in upfront costs for a new rental. That's up 29% from 2019. To put that in perspective, that's 14% of the city's median income. This leads to what some have dubbed a "lock-in" effect, where the prohibitive costs of moving are keeping renters in place.

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

Manhattan Snapshot

Median Recorded Sales Price

-4.5%
Month-Over-Month

-0.5%
Year-Over-Year

Contracts Signed

+18.3%
Month-Over-Month

-6.2%
Year-Over-Year

Average Days on Market

+0.6%
Month-Over-Month

+13.5%
Year-Over-Year

Inventory

-2.8%
Month-Over-Month

-4.4%
Year-Over-Year

Source: Compass February 2024 Manhattan Market Report

Brooklyn Snapshot

Median Recorded Sales Price

-0.3%
Month-Over-Month

+10.7%
Year-Over-Year

Contracts Signed

+7.5%
Month-Over-Month

-4.9%
Year-Over-Year

Average Days on Market

+7.3%
Month-Over-Month

+36.1%
Year-Over-Year

Inventory

+1%
Month-Over-Month

-1.6%
Year-Over-Year

Source: Compass February 2024 Brooklyn Market Report

February 2024 Manhattan Market Report

February 2024 Brooklyn Market Report

In The News

The fixed income markets are anticipating that the U.S. Federal Reserve will maintain interest rates at their current levels following the Fed's upcoming meeting on March 20. This would extend the recent trend in which the Fed has opted to keep rates steady. The last rate hike occurred in July 2023. However, market sentiment suggests a potential rate cut by the Fed no later than July 2024, and possibly even as early as May of this year.

Both Federal Reserve projections and market forecasts point toward potential adjustments in the latter half of 2024. The market currently expects around three to four rate cuts by December 2024, and projects that short-term rates will conclude the year slightly above 4%. The Fed's policymakers will provide updates on their economic forecasts, including interest rate outlooks, during the March meeting's Summary of Economic Projections, which will be closely monitored by market participants.

The minutes from the Fed's January meeting, released on February 21, indicated that many within the Fed believed the policy rate had likely peaked for the current tightening cycle. While this suggests a downward movement in interest rates in the medium term, policymakers said it would be inadvisable to lower the target range for the federal funds rate until they acquire stronger assurance that inflation is steadily progressing toward the 2% mark. Nevertheless, discussions within the Fed about potential rate cuts signal a shift from the language observed in 2023, which leaned more towards scenarios of potential interest rate hikes.

Read More Here

City Spotlight: The Orchid Show: Florals in Fashion

Experience the enchanting fusion of nature and couture at the New York Botanical Garden's "The Orchid Show: Florals in Fashion," running now through April 21st. Immerse yourself in a world where the delicate grace of orchids intertwines with the innovative realm of high fashion, curated by visionary designers who have transformed these blooms into mesmerizing masterpieces. Wander through breathtaking installations that present orchids as avant-garde couture, regal inspirations, and whimsical figures adorned in floral attire.

For more than twenty years, the annual orchid show has marked the onset of spring for tired New Yorkers longing for relief from the winter's chill. Elevate your experience with Orchid Nights, an exclusive 21+ event featuring music, performances, cocktails, and delectable bites, and taking place on March 30 and April 5, 6, 12, 13, 19, and 20. Enjoy an unforgettable exploration of botanical beauty and artistic innovation, where orchids reign supreme and fashion steals the spotlight.

For Sale

Upper East Side

115 East 86th Street, Unit 23

1 BD   1 BA   900 SF   $899,000

Coming Soon

KIPS BAY

251 East 32nd Street, Unit 19F

1 BD   1 BA   750 SF   $599,000

This sunny, spacious, renovated home has open city views from southern and western exposures. The apartment features hardwood floors, an open kitchen with stainless steel appliances, and six large closets, including two California closets.

Off-Market Listing

Upper East Side

Perfect for an investor or end user. 
Tenant in place paying $7,750/month. Tenant can vacate with 30 days' notice. Contact me for details.

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.

Most Recent Mortgage Rates

Rates are from Citibank and are effective as of 03/06/2024. 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 family-friendly activities to romantic fine dining, it's as simple as sending me an email.

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

www.rebeccaorbach.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.