It’s always the season of NYC.
New York City is not just a place. It is a feeling. When a place becomes a feeling, it might be beneficial to utilize a paradigm that takes both the rational and the emotional into account to get a sense of where we are at and where we are going.
Let’s look at some of the data and see how we are feeling.
For the Manhattan sales market, we are continuing to see compression on the supply-side with 5,826 listings, down 12.2% from last month. This is, of course, normal in terms of the holiday season. However, we are still down 7.1% for listings on the market from last year. Shifting gears for a moment, we are seeing some bullish signs in terms of listings in contract. Pending sales are up 4.7% from last month and are up 25.5% from last year. For buyers, we are also experiencing a sort of delayed reaction post rate cuts from the Fed, as mortgage rates have finally started to decline over the last several weeks. While the Fed does not directly set mortgage rates, it heavily influences them. It adjusts the federal funds rate based on the economy, which impacts banks’ borrowing costs and the prime rate—the basis for loan APRs, including mortgages. Lenders then add their own margins, causing rates to vary by lender.
Moving on to rentals, we have some promising takeaways, along with some hurdles, for landlords from November’s data for the Manhattan leasing market. Median rent rose 5% year over year, along with a 0.5% increase in the average rent per sf year over year. While we had a 2% decrease in average rents compared to last year, inventory edged up 4.2% over this period. For renters looking for options during this season, the average rental price was down 2.3% when comparing October’s data to November’s rental numbers. We expect to see some additional month over month declines when the December data are printed.
Now let’s take a brief dive into some of what we are seeing in crypto markets, which in many ways is beginning to correlate with overall investing sentiment, ranging from traditional equities, real estate and even the art market. There might not be another crypto-currency that better exemplifies the absurd emotionality and strange alchemy that has created real wealth than Dogecoin. Released just over 11 years ago with fairly nebulous utility, the coin is up over 236% in the last 3 months. Billy Markus and Jackson Palmer were software engineers who decided to create the payment system as a joke, in response to the wild speculation in cryptocurrencies at the time. The Dow Jones is up 1.3% over the same period, with the NASDAQ up 8.6 %. Bitcoin, the first major crypto-currency, is up 60% over the last 3 months.
Returning to real estate, there are some potentially very positive takeaways that we may draw from the overall context of investor sentiment and mortgage rates. Zillow is predicting continued mortgage rate improvements in 2025, and a return to historic norms. Regardless of where someone is on the political spectrum, there is certainly upward movement in the equities markets coalescing around the overall notion that the next administration will ultimately have less regulation for corporations. This could reflect in higher stock prices in 2025, and ultimately release greater buying power for some investors looking to purchase a home. Of course, we are also contending with a new administration that is threatening tariffs, and we have an exceedingly challenging overall geopolitical climate. In terms of advice, there may be an opportunity for the savvy buyer to unlock value early in 2025 before much of the anticipated new inventory comes to market for the spring. Buying early in the year may also be a way to purchase before the potentially improving mortgage rate climate pushes prices further upward. For those looking to rent, it appears that the increased inventory trends from last year should continue into 2025. What this means for tenants is increased optionality that should prevent some of the massive jump the shark pricing we have historically seen in hot markets.
Maybe a sort of rational emotional intelligence is essential here for an interpretation of the positive elements in this real estate market, along with the challenges that this market presents. However, challenges or not, New York City is the greatest city in the world. Perhaps it is even more than a city. Maybe it is a world. Wishing everyone happy holidays and a happy new year!
Whether you’re interested in renting your unit, selling, or searching for a new home, Platinum Properties is here to help. Contact us today to be connected with one of our trusted agents to find the best real estate solution for your needs.
