The burst of new listings we were expecting to begin mid-January never materialized. As a matter of fact, the continuing low supply of properties is pretty significant. Here’s what we are seeing.
● We’re in an elevated transactional environment. For the last 14 months, downward pressure on inventory has caused an escalation in the number of contracts signed. Some potential buyers who may have been on the fence are moving more quickly to lock in mortgage rates before they rise further. A sense of urgency is returning to the market.
● “Flash inventory,” the phenomenon coined recently by my Compass associate Leonard Steinberg, is the property that comes to market “and is snapped up so quickly it can make your head spin. Sometimes it barely makes it into the MLS systems.” Scores of listings all over town are gone within weeks, days and sometimes hours. These properties are priced on target and staged to sell. Flash inventory buyers are nimble, prepared and ready to act with representation by strong and smart professionals, namely a trusted agent who shares valuation, comps and insights, and a respected attorney who will expedite contract review and due diligence. These extremely qualified buyers are armed with pre-approval and financial statements and can move to contract speedily with zero contingencies and every confidence to conclude the transaction.
● It almost feels like 2015 in terms of deal flow with all the activity, but prices mostly are not rising, at least not in NY which is performing differently than other urban cities, most notably in South Florida where the appreciation is greater than 40% and rising. This week a home in Palm Beach priced at $4M attracted 25 bidders and went to contract at a spectacular $3M more.
● The average rate on a 30-year mortgage climbed to 4.03% from 3.85% last week, according to Bankrate’s weekly survey of large lenders. Rates have been inching up weekly this month, well past the all-time bottom of 2.93% in January 2021. Will rising mortgage rates create headwinds for price appreciation? Undoubtedly they will have less impact on luxury buyers than entry level purchasers. Purchasing power may fall for millennials who are prime first time buyers.
● As we’ve noticed in grocery and retail stores, inflation is driving up the cost of day to day living expenses with consumer price increases not seen in 40 years. January's inflation figure was 7.5%, the highest level since 1982 and will probably remain high throughout 2022.
If now is your time to buy or sell, gather your dream team. We are armed and poised to realize your housing goals and help you find your place in NY and the world.
Shirley Hackel, NYRS®
shirley.hackel@compass.com | (914) 980-0371