We’ve seen an inevitable shift in the market with conditions cooling down and pricing correcting itself. *
First, a comment on the general U.S. market is in order and I’ll start with a quote from Mark Zandy of Moody’s:
“I just don’t see the kind of mortgage defaults and distressed sales that would be necessary for big declines in housing values. That’s when you get crashes when you have lots of foreclosures and a lot of distressed sales. That’s just not going to happen.”Having said this, 2022 is witnessing the great rebalancing of markets.
The era of ultra-cheap borrowing costs has ended. With that, & with the general economic climate, some prices have & will come down. Sales volume is & will adjust in areas to a more balanced level after an exuberant 2021. Where demand continues to outstrip supply, prices will continue to rise. Inventory levels will be restored in areas & finally, some irrational seller aspirations have & will be checked.
NYC & MANHATTAN MARKET:
Real estate is hyper-localized; especially so in Manhattan & NYC.
It’s a folly to simply read headlines & look at averages about non-specific data. The data & insights that are hyper-localized are what matter. Some properties may be over-valued, some may be fairly valued & others may even be under-valued. Specifics matter more now than ever.
SOME DATA (graphs below):
At $144 million in sales volume, the luxury market (above $4M) saw a 24% decline compared to last week.
At $467 million in sales volume, the general market saw a 16.4% decline compared to last week.
The total supply has remained relatively steady since the beginning of May.
If you’re a buyer: evaluate all financing options as rates can vary considerably.
In a recession (assuming we’ll have one), usually, the Fed lowers rates to stimulate growth. Refinancing at lower rates in the future is a possibility.
Cash buyers have been waiting for this market. They will feel more empowered now than ever. If you’re a cash buyer, seize the moment.
With the inventory of buying options rising, focusing on the best quality is always the smartest. Buying a quality home for a fair price is always smarter than going for a bargain.
Although these markets may not be your market, this will give you an idea of what the higher-end markets are doing, which will also affect your market.
Focus on the *long term*. We cannot aim to time markets ‘perfectly’, because the real estate market historically has always done well.
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