Recapping 2023
December 13, 2023
New York City’s residential real estate market in 2023 was mostly about recalibration and resilience. Despite the year’s challenges posed by banking industry shakeups, spiking mortgage rates and uncertain global political and economic landscapes, the city's real estate sector remained stable. Near the start of the year in February, appraiser Jonathan Miller forecast that this year would be one of disappointment and predicted, “Sellers are not going to get the price[s] they wanted … and buyers aren't going to get meaningful discounts.” Following are a few noteworthy market dynamics.
Mortgage interest rates are dipping, finally
More than 50% of our team’s transactions this year were all cash. Slowly, buyers are acclimating to a higher mortgage interest rate environment. Rates have come off their mid October highs and have been drifting lower, but they won’t be returning to 3% any time soon. With the slowing of inflation and economic growth, home loan rates are likely to dip further, presenting more opportunities for buyers and sellers. Economist Gregg Heym sums it up simply: “Lower rates mean buyers can get more for their money, and sellers will have more eyes on their listing[s].”
Buyer activity is on the rise, but inventory is still shrinking
Buyers actively looked for properties this year but found their choices were limited. Our own team, in fact, doubled our buyside representation in 2023. As more people return to their offices, housing demand is rising, underscoring the enduring appeal and allure of our city. But quality inventory remains low largely because of interest rates. Sellers with “golden handcuff” mortgages of 3% or less are reluctant to offer their homes for sale and are neither trading up nor down.
It’s neither a buyer’s market nor a seller’s market
This year’s supply-demand imbalance has given rise to what agents call a “broker’s market” — one that requires experience, patience and insight to make deals happen. Personal outreach between networking brokers is always important, but even more so in tough markets. In collaborative and supportive settings within and between firms where we rely on mutual respect and professionalism, we get deals done. Coming off the pandemic of 2020, the years of 2021 and 2022 were pretty spectacular in terms of volume and velocity. It’s taking a combination of skill, strategic resources and patience to get buyers and sellers to the closing table.
Reviewing our team performance
By the end of this year, my team will have closed more than $43.6M in sales, representing a nearly equal number of buyers and sellers. More than 70% of our sale exclusives closed at the asking price, and the balance closed between 3-5% off the ask. Hope is not a strategy. For each property, we take full advantage of marketing tools, and place target pricing and clever staging at the forefront.
If you plan to buy next year, we will help you to uncover purchasing opportunities. If you plan to sell, we will help you to understand what will drive buyers to your property. I’ve never been a proponent of testing the market with a high price as it misses the burst of energy that a new listing brings. The initial marketing period attracts the most attention, and once the first three to four weeks pass, these can’t be reclaimed. As important as realistic pricing, how a property is positioned and presented is critical to gain the attention of buyers, especially in a lackluster environment. While virtual photos may get people through the door, it’s real staging that closes the deal.
We look forward to working with you in 2024. Meredith and I wish you and yours happy holidays and a healthy and peaceful new year ahead.