Q1 2024 Newsletter

Today In Real Estate

Dear friends and clients,

Spring is springing across NYC, and in real estate, we are hopeful that April will finally fulfill the promise we had going into 2024. While the market seemed to fizzle in March, the real estate topic dominating headlines here and nationwide has been broker commissions. If you haven't heard by now, the National Association of Realtors and several of the mega-brokerages (including Compass) recently settled class action suits alleging collusion in setting broker commissions.  The settlements provide that MLSs can no longer advertise buyer broker commissions, though such commissions can continue to be offered by sellers or advertised elsewhere, and buyer's agents will need to have signed buyer contracts at the onset of their representation.  

While many agents have been outspoken about the merits of these cases and what impact they will have on the industry, I'm not an antitrust expert nor do I have a crystal ball. If approved, these settlements will go into effect in July and only then can we begin to understand how it will re-shape the industry.  I continue to believe in the tremendous value of an experienced and ethical buyer's agent, particularly in a market like New York where the stakes are higher and the process is complex.  Good agents will not only survive but may ultimately benefit from a raising of the bar. 

Manhattan Snapshot

While the year started with promise, the positive momentum was cut short when interest rates rebounded in late February, contrary to expectations.  This led to fewer signed contracts in March compared to last year following year-over-year gains in January and February.  Though total inventory was up moderately, this was partially due to slower sales rather than an increase in new listings, which for much of the quarter lagged behind last year's figures and historical averages.

6,264

Active Listings
+2% Q-o-Q
+2% Y-o-Y

2,737

Signed Contracts
+18% Q-o-Q
-6% Y-o-Y

In general, average prices for in-contract listings were up while closed sale prices were down, suggesting Manhattan reached the bottom of the market in Q4 of last year and is entering a recovery phase. The decline was also partially attributable to a shift in the makeup of sales. In search of value, buyers favored resale coops, which saw a higher than usual market share, and an increase in closings under $2M, along with an accompanying significant drop in new development sales. One striking statistic was that 63.4% of all transactions were cash deals.

$1,640

Median Sold PPSF
-12% Q-o-Q
-14% Y-o-Y

$1.050M

Median Sale Price
-9% Q-o-Q
-5% Y-o-Y

In terms of neighborhoods, there were no big surprises with Downtown dominating. The top priced neighborhoods were all Downtown: (1) Noho, (2) Tribeca, and (3) Soho/Nolita.

Though overall results were mixed this quarter, the initial uptick in contract activity indicates there is still pent-up demand in the market, and as we enter Q2, we’re hopeful that interest rates will resume a downward trend.

Brooklyn Snapshot

Despite strikingly low inventory, signed contracts and closed sales were both up compared to this time last year, a testament to the continued strength of the Brooklyn market.

1,411

Active Listings
+12% Q-o-Q
-15% Y-o-Y

903

Signed Contracts
+5% Q-o-Q
+3% Y-o-Y

Unlike Manhattan, Brooklyn saw an overall shift away from the lower end of the market where buyers were more heavily impacted by higher rates. Coop sales were down with a modest drop in prices marketwide, though the price drop was quite drastic in some submarkets (East and South Brooklyn). By contrast, prices for higher-priced, larger units, condos, and new development increased and these made up a higher market share than usual, driving up overall prices.

$1,049

Median Sold PPSF
+5% Q-o-Q
+3% Y-o-Y

$777K

Median Sale Price
+6% Q-o-Q
+8% Y-o-Y

As for submarkets, it was no surprise that Northeast Brooklyn had the highest prices, with Boerum Hill, Carroll Gardens, and Red Hook leading the pack, closely followed by Brooklyn Heights, Cobble Hill, and Dumbo.  On the other end of the spectrum, South Brooklyn, the largest and least expensive submarket, saw a 10% decline in coop prices versus last year.

Brooklyn will almost certainly remain highly competitive in most areas for the rest of the year, and inventory will be key. Though there is always more uncertainty during an election year, we expect that relief in interest rates may unlock listings as prospective sellers can see a reasonable next step if they sell. 

Mortgage Rate Update

5/1

Next Fed Meeting

5/3

Next Jobs Report

Last month's jobs report showed strong job growth, with 303k new jobs added, surpassing the 200k expectation, and wages increasing by 4.1% year-over-year, signifying a healthy economy overall. These combined factors likely mean the Federal Reserve will hold off on the interest rate cuts previously expected for early spring.

6.375%

Lowest Rate 3/8

6.625%

Highest Rate 3/18

RATE DATA BASED ON BASED ON CITIBANK'S 30-YEAR FIXED-RATE FOR NON-CONFORMING LOANS, COURTESY OF ZACK TOLMIE, SR. LOAN OFFICER.

Real Estate News

NYS lawmakers have seemingly struck a housing deal including a version of  “good cause eviction” and replacing the property tax break 421a with 485x. The good cause eviction bill sets the limit for reasonable rent increases at 10 percent, or the consumer price index plus 5 percentage points, whichever is lower. It excludes higher-priced units and buildings where the owner’s portfolio includes 10 units or fewer.
(THE REAL DEAL)

Is a second home right for you? Maybe if you're a DIY person who doesn't love to travel, but think twice if you're easily thrown for a loop. 
(NY TIMES)

The Fed is considering lowering interest rates to support job growth, even if it means tolerating higher inflation temporarily. Powell's statements indicate a focus on preventing a negative spiral of job losses. While some economists warn of a potential slowdown in the job market, others believe a severe downturn is improbable but worth monitoring due to historical labor market pivots.
(BLOOMBERG)

The Department of City Planning has proposed a rezoning plan for Midtown South, aiming to convert manufacturing zones into residential areas. This plan could potentially lead to the construction of 3,970 new housing units over the next decade, with a significant portion being affordable housing. The rezoning will affect four areas of Midtown South, bounded by West 23rd and West 40th streets and Fifth and Eighth avenues.
(THE REAL DEAL)

Curated Collection

Spring is here! Explore a collection of our favorite listings with private outdoor space across Manhattan and Brooklyn. 

Listings & Recent Sales

1 Hanson Place #13E

ON THE MARKET

STUDIO   1 BA   $599,000

202 Broome St, #10F

ON THE MARKET

2 BD   2 BA   $1,995,000

79 Worth St, #4R

IN CONTRACT - BUYER REP

2 BD   2 BA   $2,999,000

123 Chambers St, #PH

JUST SOLD - BUYER REP

3 BD   3 BA   $3,950,000

283 President St, #3

JUST SOLD - BUYER REP

3 BD   2 BA   $2,522,813

1199 Park Ave, #12H

JUST SOLD

2 BD   2 BA   $1,365,000

Hear it from our clients! 

"I've worked with Isil and her team on seven separate transactions, and I would recommend her wholeheartedly to anyone looking to buy, sell or lease a property in Manhattan or Brooklyn. One of our sales together involved an investment property I'd been renting out for a number of years. Isil and her team did a spectacular job suggesting and managing several improvements (painting, staining the floors, wallpapering) and provided beautiful staging at their cost, rather than recommending an expensive stager. After all of that and finding a buyer, a massive storm threatened our sale. I could not have navigated the construction and legal challenges caused by the damage from the storm without her expertise. They're simply the best!"

– Anna, a Cobble Hill Condo Seller

Office: 646-982-0353

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.