Predictions For 2023 Sales Market

David Goldsmith

All Powerful Moderator
Staff member

NYC home sales slowdown coming in 2022, Brown Harris Stevens CEO says​

Bess Freedman cited higher interest rates, diminishing supply​

After 2021 marked a banner year for housing markets inManhattan and Brooklyn, New York City home sales could slow in 2022, BHS CEO Bess Freedman said.
Freedman told Bloomberg TV’s Surveillance that higher interest rates and housing supply woes could spur the change of pace among the city’s sales.

“The Fed announced that rates will go up maybe two to three times next year, so we may see a little bit of a slowdown,” Freedman said to Bloomberg. “Also, supply has diminished because demand is so heightened.”

The brokerage leader’s prediction mirrors similar projections from Jonathan Miller, who compiled a November market report for Miller Samuel on behalf of Douglas Elliman.
“Inventory is continuing to collapse, and that’s why we anticipate continued price growth into the new year,” Miller told The Real Deal.
Real estate data from UrbanDigs published earlier this month said that through Dec. 5, listings in Manhattan exceeded the 2008-2018 average by 18 percent. But buyers exhausted supply at an even faster rate, putting net new inventory below zero for nine of 11 months this year. Net new inventory in November was negative 861 units.

Meanwhile, UrbanDigs noted that listing discounts fell consistently throughout the year for the first time since mid-2015. Prices rose in tandem, helping lead to a banner year for the Manhattan’s luxury market.
Supply and demand issues across the country have spurred the housing market along. A report from Redfin showed the number of homes on the United States market hit a historic low during the week ending Nov. 28. There were fewer than 539,000 active listings that week, a 26 percent decline year-over-year.

Strong demand and weak supply resulted in a median sale price of $360,375 across the U.S. for the first four weeks of November, surpassing a record dating back to July 25.

David Goldsmith

All Powerful Moderator
Staff member

The Brooklyn apartment market was red hot in 2021. “It reached new records for both sales and prices,” said Gregory Heym, Brown Harris Steven’s chief economist. “And demand for townhouses was also very strong, as those prices also hit a new high.”
For 2022, while competition for neighborhoods throughout Brooklyn expects to reach record highs, some factors remain unpredictable.
Here is an overview of the market’s outlook for 2022, with insights from top Brown Harris Stevens agents and brokers specializing in Brooklyn real estate.
Ban Leow, BHS real estate agent:
Current market forecast, simply put, is unpredictable, and also very segmented in different neighborhoods. While Park Slope, Downtown Brooklyn, Cobble Hill and Carroll Gardens are experiencing a robust buying spree, other neighborhoods are experiencing stagnant inventories with tons of window shoppers. We’ve been on a Covid-19 pricing roller coaster since 2020, and with a new variant detected, the “yo-yo” pricing goes into effect. Sellers demand high listing prices and the buyers are still in the “pandemic” low-ball mode. I believe the market will gain strength again in mid-2022 if the Omicron variant is somewhat contained.
Steven Segretta, BHS real estate agent:
I see active buying interest across all sectors of the Brooklyn market driven by first-time homebuyers and those migrating into Brooklyn from other areas. Given the strength of the market last year and the acceleration this year, I expect demand to outpace supply in 2022 with continued upward pressure on prices. Macro factors like the economy, inflation, rates and the pandemic may obviously change the dynamic, but without dramatic shocks to the system, I think we see continued momentum in the Brooklyn real estate market.
Joanna Mayfield Marks, BHS real estate agent:
Rates are supposed to hold into July, loan limits on one- to three-family homes were just increased nationwide and Brooklyn is cool. I believe, because of these factors, the first half of the year is going to zoom! Borrowing power is up. Buyers have flocked to Brooklyn for the “cool” cachet for over a decade, and some who left for a season have returned. Now living happy and well is paramount and Brooklyn offers it all: Light, air, parks, culture, art, cuisine. We are the youngest, most highly educated, diverse borough — according to Mayor Eric Adams.
Bill Sheppard, BHS real estate agent:
As we continue to live with Covid concerns, buyers still need to get on with their lives. I expect 2022 will be a very competitive year for Brooklyn buyers, especially for townhouses, as outdoor space and square footage continue to be a priority.
Dena Driver, BHS real estate agent:
I believe the fourth quarter reports will only further confirm the strong return of New York City real estate. Luxury real estate signed contracts tripled in 2021 compared to 2020, which was a weak year, but I expect when the fourth quarter figures come out, they will be vastly up even when compared to 2019.
Brooklyn has had a stronger market overall when compared to Manhattan through the pandemic; people are still moving to Brooklyn for the lifestyle and access to waterfronts and green spaces. The economic figures, expected bonuses and jobs growth all remain high.
Peter Grazioli, BHS real estate agent:
I think we will see continued strong demand, especially in the townhouse market, and some pricing stability as we saw starting in the last half of 2021. The smaller studio and one-bedroom units will continue to be slow going.

David Goldsmith

All Powerful Moderator
Staff member

2022 NYC real estate forecast: Buyers look over their shoulders, sellers wait for prices to rise, renters catch a break

New York City’s real estate market boomeranged in the second half of 2021: Renters and buyers returned to the city and snapped up apartments. Thanks to that burst of demand, Covid discounts and concessions nearly evaporated as owners and sellers gained the upper hand. Now that Omicron infections are skyrocketing, it feels like New Yorkers are collectively holding their breath—waiting to see if we are in for another bad stretch.
Omicron is a major question mark, but there are some indications of what 2022 will bring: There will be less competition for rentals since the stampede of returning New Yorkers is largely over, although you can expect rents to continue to rise. And for tenants battered by job loss and unable to pay rent, there may be more federal funds and legislative protections.
On the sales side, buyers can expect to have more apartments to choose from as the market reverts to typical spring and fall selling seasons. They will feel pressured to lock in a deal before mortgage rates inch up and prices ascend past pre-pandemic 2019 levels. Sellers can anticipate the return of international buyers as long as international flights remain possible—and travelers here feel safe.
Our 2022 forecast is designed so you can skip ahead to the section most relevant to you via the links below. However, because each segment of the NYC real estate market is interconnected, we recommend reading through the entire piece when you have the time.
Whether you plan on buying, selling, or renting a new place, here’s what you need to know in order to achieve your real estate goals this year.

What to expect if you’re a renter​

If you’re going to be hunting for a rental in 2022, you may be feeling discouraged. It’s tough to find a place to rent these days and the deals that landlords were offering during the height of the pandemic are practically gone. Manhattan rental inventory plunged as a result of intense leasing activity in the fall, with the median net effective rent surging a whopping 23 percent in November. The Brooklyn and Queens rental markets also saw increases in rents and similar frenzied leasing.
But you may be able to catch a break in the coming months. The turbo-charged rental market is slowing down after a year and beginning to approach more seasonal levels, says Jonathan Miller, president and CEO of appraisal firm Miller Samuel. That may be because NYC has already regained three-quarters of its population that left during the lockdown, setting the stage for a further slowing of demand for rentals this winter.
“We had eight to nine months of pent-up demand crammed into 90 days, giving the impression the rental market is a lot hotter than it actually is,” says Adam Frisch, senior managing director of leasing at Lee & Associates, a management company representing small building owners in Manhattan.
This winter will feel very different from the fall, he predicts.
You can expect to see an “unprecedented amount of vacant apartments” available this winter, Frisch says. Units that normally would have rented in the late summer to early fall in 2020 sat on the market until the winter to early spring of 2021 because landlords took a while to drop the rents to below market rate.
“Landlords are now sending out renewal notices with increases at pre-Covid rates,” Frisch says. “A lot of renters can’t afford those apartments, and most will leave,” he says.
That could mean more availability and better deals in prime Manhattan and Brooklyn neighborhoods—if you don’t mind checking out apartments when it is bitterly cold.
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Rents predicted to rise in 2022​

Now more than ever, the high and low ends of the rental market are behaving like they are in two different cities: Rents are increasing at a faster rate for doorman buildings (a proxy for the high end) compared to non-doorman rental buildings. Most expect this pattern to continue—driven by the need for larger apartments (read: more expensive) to accommodate New Yorkers who are working from home and generally spending more time in their apartments as the pandemic rages on.

“The high-end rental market is incredibly strong. We are seeing bidding wars and swift lease signings on nearly every listing, even apartments asking over $40,000 a month,” says Kirsten Jordan, a broker at Douglas Elliman. These trends will continue in 2022, she predicts.
The numbers tell the story even better. According to the Elliman Report, in November, the median rent for Manhattan doorman buildings was $4,200, a 20 percent increase over the $3,500 median rent seen in November 2020. The median rent for non-doorman Manhattan buildings in November was $2,650, an increase of 6 percent from November 2020.
While rents are on the rise, they still have not surpassed pre-pandemic levels two years ago—case in point the median rent for a non-doorman building in November 2019 was $3,000.
In anticipation of rising rents, more renters are choosing to lock in better deals with longer leases, a pattern Miller is seeing across the city—and something to consider if you’re weighing a new lease.
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Bidding wars for rentals may come back this summer​

One of the stranger hallmarks of the NYC real estate market during the pandemic has been the trend of bidding wars for rental apartments, which happened in the summer and early fall of 2021 in many NYC neighborhoods. The rental market seemed a lot like the sales market as a result of a spike in demand from renters flooding back to the city in anticipation of office reopenings and the start of the school year.
One Park Slope renter who was asked to submit her best and final offer told Brick: “I felt like I was buying.” Nicole Beauchamp, an agent at Engel & Völkers, said trying to get into a Midtown West showing for a hot apartment was like “trying to get into a club.” There were about 15 people waiting to see the place.
Will there be bidding wars for rentals again in 2022? If offices put off fully reopening until late spring or even summer, when Covid cases plummet with warm weather—there could be a repeat of last year’s rush back to the city, one major property manager predicts.
Robert Morgenstern, principal of Canvas Property Group, a property management company that owns 2,000 NYC apartments, says last year’s market was unique, but “this summer could be equally intense.”
He predicts offices will “continue to reopen after what we can only hope is a temporary spike of Covid.” That will draw renters back, but he says they’ll be hampered by a lack of apartments. Morgenstern blames the shortage of rentals to a lack of tax incentives for developers and changes to the rent laws that discourage landlords from deregulating apartments.
“We have seen the most demand for apartments in primarily residential areas where the retail and restaurant scenes are booming,” Morgenstern says. “We saw the market explode in direct correlation to the nightlife scene.” Neighborhoods like the East Village, Lower East Side and Williamsburg were “all thriving, while the type of building and amenity offerings seemed less relevant,” he says.

Financially struggling renters could get more aid​

If you are behind on your rent, you may be eligible for rental assistance through the Emergency Rental Assistance Program (“ERAP”) or other related programs. The fund has been rapidly depleted, but New York could get a lifeline from a plan to reallocate funds from states where they haven’t been maxed out.
When you have an open application for ERAP or related assistance, you are entitled to an automatic stay of any eviction proceeding for nonpayment of rent. Meanwhile housing court continues to move very slowly—as a result of a pandemic backlog.
Some good news for market-rate tenants is the possible passage of the good cause eviction law. This would extend the protections given to rent-stabilized tenants to those in market-rate apartments, allowing all tenants automatic renewals unless the landlord has good cause to evict. Previous versions of this bill have also capped rent increases at renewal time.

What to expect if you’re a buyer​

Throughout 2021, the number of Manhattan and Brooklyn co-ops, condos, and townhouses for sale didn’t keep up with demand. As a result, bidding wars heated up, the Covid discount shrank, and prices increased.
But New York City still has some runway to go before approaching the inventory drought that has gripped suburbs for virtually the entire pandemic.
According to the Elliman Report for the Manhattan sales market in the third quarter, there were 7,694 available listings in Manhattan, about 17 percent more than the 10-year average for the third quarter. The months of supply, or how long it would take to sell all inventory, was 5.1 months–quite a bit less than the eye-popping 20.3 months in the third quarter of 2020.
“At the current rate of demand, Manhattan likely won’t experience the same extreme level of inventory shortages [as the suburbs] for another year,” Miller says.
Still, that may not be comforting to buyers who have been unable to land a deal.
“So far in December we've seen more units signed into contract than have been listed for sale, so buyers are out in force while sellers are slowing down,” says John Walkup, co-founder of real-estate analytics firm UrbanDigs.
A bright spot for buyers is a normalizing pattern of spring and fall selling seasons. Walkup is among those who say that seasonality has “generally returned to the market.”
“I anticipate the next wave of listings will begin in February, which is the usual pattern,” Walkup says.
However, with new records being shattered for Omicron infections in New York by the day, making timeline predictions is fraught. Sellers could take a page out of 2020’s playbook and hold off on listing their apartments until the surge of infections passes.
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More New Yorkers will have access to lower-cost mortgages​

In 2022, more NYC buyers will get something they have not had before: Cheaper conforming loans from Fannie Mae and Freddie Mac that will boost their buying power.
The new, conforming loan limit for mortgages that can be acquired in high-cost areas like New York City is $970,800, an increase from $822,375. It will likely be a boon to buyers who couldn’t meet jumbo loan requirements such as having six months of mortgage payments in your bank account, versus the typical two months' worth for a conforming loan, explains Brittney Baldwin, vice president and loan officer at National Cooperative Bank (a Brick Underground sponsor).
Some strings are attached though. In response to the condo tower collapse in Surfside, Florida, Fannie Mae is changing lending guidelines to prevent buyers nationwide from purchasing in co-op and condo buildings without sufficient reserve funds to pay for structural repairs or use an assessment to pay for repairs involving structural integrity (until the repair is completed).
Effective January 1st, loans for condo or co-op units in buildings with significant underfunded reserves or unsafe conditions will not be “eligible for purchase”—meaning Fannie Mae will not buy these loans back from lenders—which will likely prompt lenders to tighten their standards to match. There’s also a new reserve fund requirement: Buildings will have to keep 10 percent of their operating budget in their reserve fund, a departure from past practices that allowed buildings to offer up a reserve study instead.
These stricter standards may result in an “uproar” from buyers not getting access to financing—and stepped up maintenance and common charges in buildings that need to shore up their reserve funds in order to come into compliance, says Orest Tomaselli, president of project review at CondoTek, which provides data on condos for lenders.

Mortgage rates set to climb in 2022​

Real estate sales have been juiced by mortgage rates hovering near historic lows for an extended period, a result of the Federal Reserve buying mortgage-backed securities to support the economy. But the Fed plans to taper off those purchases to curb rising inflation—and mortgage rates are expected to rise.
New economic projections indicate the Fed may raise interest rates three times in 2022. Omicron is still a wild card, however. If the impact of the new variant is severe it could keep the Fed from executing its tapering plan, says Melissa Cohn, regional vice president and executive mortgage banker at William Raveis Mortgage.
Cohn says that the Fed’s revised policy won’t hurt buyers looking to purchase a home within the next few months, but you might want to act soon.
Mortgage rates should remain around 3 percent through the early part of 2022, Cohn says.
She expects to see a .25 percent to a 0.5 percent increase in mortgage rates over the next couple of months, with a limited impact on real estate: “The real estate market was doing well when rates were at 3.625 percent, and will do so again,” she says.
Pro Tip:
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What’s the likelihood of raising the SALT cap?​

Changes to the State and Local Tax cap could keep more money in owners’ bank accounts—that’s if Washington approves.
The Biden administration’s Build Back Better bill calls for raising the SALT cap from $10,000 to $80,000 through 2030. After that it would be reduced to $10,000 and then expire completely.
However, repealing or raising the cap is probably a low priority in the ongoing negotiations to get the bill through the Senate. Some see it as a perk for wealthier coastal Americans in high tax states like New York. If there is no change at all, the current $10,000 SALT cap will expire after 2025.
Buyers want to see legislative action because more money in their bank accounts boosts their spending power—leaving more money to spend on a mortgage, for example. And sellers would appreciate this because it means buyers are more likely to make a move—and can trade up a larger place.

What to expect if you're a seller​

If you’re planning to sell this year, expect to encounter a brisk market, but one in which prices have not yet fully rebounded to their pre-Covid 2019 highs.
Prices won’t fully recover until 2023 or 2024, predicted UrbanDigs CEO Noah Rosenblatt and COO John Walkup on a recent panel discussion since international and investment buyers have been sitting out the market. Walkup notes that when businesses fully reopen and NYC’s ground-floor stores come back to life—these types of buyers will return and drive prices higher—but it will take time for this to happen.
Sellers can expect pandemic price cuts to not cut as deep in 2022.
Miller has been tracking what he calls the “Covid discount,” an estimation of how much Covid brought prices down below what was expected—if there had not been a pandemic. In 2021, that discount was about 5 to 7 percent.
“Entering the new year, the aggregate Covid discount is less than 5 percent in a highly polarized market, but it looks like it will be largely eliminated by the summer if current trends hold. The assumptions include the Omicron variant peaking in January as expected and mortgage rates continuing to remain where they have been over the past few months,” he says.

Renovated apartments give sellers an edge​

If you’re selling a renovated apartment or brownstone, you will continue to have an edge this year because of supply chain issues. Many buyers will shrink away from renovations due to major backlogs and shortages for appliances, parts and materials that are driving up costs and causing delays (or requiring renovators to come up with alternate plans.)
“Unrenovated units are not enjoying the recovery as much as renovated,” Rosenblatt notes, describing them as “flatlining” as a result. The supply chain “is all broken down,” he says.
Apartments with private outdoor space will also maintain their advantage. Pandemic-era buyers are willing to pay an even bigger premium for this amenity.
Garrett Derderian, director of market intelligence for SERHANT, recently figured out just how much more. In a recent report, he looked at sales of Manhattan and Brooklyn condos and co-ops before and found that after the lockdown, Manhattan apartments with outdoor space sold for an average price per square foot of $1,625, compared to $1,345 for apartments without outdoor space. That represents a premium of 21 percent, and an increase of 3 percent over pre-lockdown pricing.
Derderian predicts outdoor space will continue to be worth more going forward, even as apartments without outdoor space start to recover with the return of international buyers to the NYC market.

Will international buyers return in force?​

In early November, when the U.S. reopened to vaccinated international travelers and before anyone had even heard of Omicron, there was the expectation that like some well-heeled cavalry, foreign buyers would be returning to snap up the luxury units that had been lingering on the market.
The coming influx spurred some local buyers to get off the fence, says Michael J. Franco, a broker for Compass.
It made “domestic buyers move more quickly and make offers more quickly, thinking that they’ll have a limited amount of time to get a certain deal on a property, and they think that prices are going to go up,” he says. “I recently sold an apartment at The Plaza, and both of the buyers who were pursuing it were conscious of foreign buyers coming back and wanted to make a deal happen quickly.”
Now that the Omicron variant is surging, the future is more uncertain.
“There may be a return of international buyers, but it won’t be a huge influx in 2022, particularly because some European countries are shutting down again,” predicts Ellen Sykes, a broker for Warburg Realty.
Still, another broker says NYC can count on a wave of buyers from China. Mark Chin, a broker at Keller Williams New York City, says the defaults of large Chinese real estate developers is almost certain to send over buyers who want to park their funds in the safe haven of NYC real estate.
“For a while the Chinese buyer evaporated because they were making so much money at home,” Chin says. “That ship has sailed.” In 2022, we “will start to see Chinese money here,” he says, estimating that eventually “billions are going to be invested in residential real estate.”
And it doesn’t matter if borders are closed or not. As Chin points out, “Chinese buy off-plan all the time” meaning they frequently buy condos that are under construction. And they are equally at ease buying something sight-unseen. “They’re comfortable buying over Zoom,” he adds.
However, John Walkup of UrbanDigs has a different take on foreign buyers: “I think the era of wealthy foreign buyers spending lavishly on rarely used Billionaire's Row condos has likely seen its peak.”
He says that even though NYC real estate has proven to be an attractive place for foreign investors to park their wealth, buying here “comes with perpetual carrying costs like taxes and maintenance or common charges, not to mention a higher level of transparency.”
Blockchain-based crypto-currencies may present a competing way to preserve capital, if you can stomach the volatility.
“While it may not represent a significant, head-to-head competitor to NYC real estate, it is one of the growing numbers of options that come with less friction than a condo purchase,” Walkup says.


David Goldsmith

All Powerful Moderator
Staff member

Hybrid work, crypto and inflation poised to stoke 2022 luxury market​

Another strong year ahead for the sector: Sotheby’s​

Trends that have taken hold during the pandemic are poised to fuel another banner year for the global luxury housing market in 2022, according to a report from Sotheby’s International Realty.
The report is predicting a strong year for the sector. Bloomberg noted key factors behind the forecasted boom include still-low interest rates, inflation and hybrid working options available to many employees looking to grab more land.

“The real estate market is now being driven by hybrid work vs. remote work,” said Sotheby’s International Realty chief marketing officer Bradley Nelson.

The ability to work remotely could be advantageous to some in the luxury market who want to take advantage of markets without state income taxes, such as Florida and Texas. Conversely, international markets imposing increased taxes on luxury deals such as Ireland and Canada could suffer.
“You’re going to see the greatest investments continue to be in tax havens,” Nelson said to Bloomberg.

Another trend Sotheby’s is looking out for is increased transactions in cryptocurrency.
“If wealth creation drives a market, and crypto is driving wealth creation, then I think there’s going to be an increased demand for that kind of payment, as opposed to cash,” Nelson said, looking ahead to the next five years.

The report predicts other trends to continue into 2022 in the luxury space will include fading demand in the suburbs and higher prices in the exurbs, as well as a rebound in urban centers. Nelson said it was virtually impossible to underprice a home as demand and low supply would pull up competition, but the same isn’t necessarily true for overpricing a home.

“It’s certainly possible to overprice a property,” Nelson said. “But ultimately, with some of these ambitious asking prices, I think it’s a strategy of price discovery.”
In Manhattan, the luxury market kicked off 2022 with a strong start. The market saw 22 luxury contracts signed between Dec. 27 and Jan. 2, the highest volume to start the year since Olshan Realty’s luxury market report began in 2006.

David Goldsmith

All Powerful Moderator
Staff member
Who predicted this? We know how the prediction in the previous post about luxury sales booming further is currently going.

“A housing recession”: Home sales fall for six straight months​

Median sales price fell by $10K in July: NAR​

Government officials have been loath to declare the country in a recession. In the housing market, however, some economists believe existing home sales are already there.
Existing home sales dropped for the sixth consecutive month in July, according to a report from the National Association of Realtors. The half-year streak marks the longest period of consecutive drops in eight years.

Home sales fell 5.9 percent from June to July, clocking in last month at a seasonally adjusted rate of 4.81 million. Year over year, sales declined 20.2 percent.
The drop in sales is being attributed in part to mortgage rates, which have been on the rise since the Federal Reserve first hiked interest rates earlier in the year. NAR’s chief economist Lawrence Yun said sales may stabilize as mortgage rates flatten below June’s 6 percent peak.

“We’re witnessing a housing recession in terms of declining home sales and home building,” Yun said in a release. “However, it’s not a recession in home prices.”

The median existing home price also dropped from the previous month, although it is up significantly from last year. The median price was $403,800 in July, down exactly $10,000 from June. It’s up 10.8 percent from last year, the 125th straight month of year-over-year gains.

While existing sales across all four regions dropped in July, median home prices jumped across the board. Miami recorded the highest year-over-year median list price growth, up 36.2 percent year-over-year.

In addition to mortgage rates, lack of inventory is also driving sales down. At the end of July, there were 1.3 million housing units available, a 4.8 percent gain from June. But that’s still a relatively low 3.3-month supply of unsold inventory at the current sales pace, which is accelerating; properties were on the market for an average of 14 days last month, matching the lowest mark since NAR started keeping track in May 2011.
It’s not clear how homebuilders will to close the gap between supply and demand and prop up inventory, but they aren’t feeling good about the market. The National Association of Home Builders/Wells Fargo Housing Market Index dropped for the eighth straight month in August, falling below the breakeven mark for the first time in 27 months.

Housing starts dropped nearly 10 percent from June to July, according to the Commerce Department.

David Goldsmith

All Powerful Moderator
Staff member
Home sales fell for the ninth straight month in October, as higher mortgage rates scared off potential buyers

Home sales declined for the ninth straight month in October.
Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors.
That is the slowest pace since December 2011, with the exception of a very brief drop at the beginning of the Covid-19 pandemic.

Home sales declined for the ninth straight month in October, as higher interest rates and surging inflation kept buyers on the sidelines.

Sales of previously owned homes dropped 5.9% from September to October, according to the National Association of Realtors. That is the slowest pace since December 2011, with the exception of a very brief drop at the beginning of the Covid-19 pandemic.

The October reading put sales at a seasonally adjusted, annualized pace of 4.43 million units. Sales were 28.4% lower year over year.

Even as sales slow, supply is still stubbornly low. There were 1.22 million homes for sale at the end of October, an decrease of just under 1% both month to month and year over year. That's a 3.3-month supply at the current sales pace. Historically, a balanced market is considered to be a six-month supply.

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The median price of an existing home sold in October was $379,100, an increase of 6.6% from the year before. The price gains, however, are shrinking, as the seasonal drop in home prices this time of year appears to be much deeper than usual.

"Inventory levels are still tight, which is why some homes for sale are still receiving multiple offers," said Lawrence Yun, chief economist for the NAR. "In October, 24% of homes received over the asking price. Conversely, homes sitting on the market for more than 120 days saw prices reduced by an average of 15.8%."

Overall, homes went under contract in 21 days in October, up from 19 days in September and 18 days in October 2021. More than half, 64%, of homes sold in October 2022 were on the market for less than a month, suggesting that there is still strong demand if the home is priced right.

While sales are dropping now across all price points, they are weakening most in the $100,000 to $250,000 range and in the $1 million plus range. On the lower end, that is likely due to the severe shortage of available homes in that price range. Big losses in the stock market, as well as inflation and global economic uncertainty, may be weighing on high-end buyers.

First-time buyers, who are likely most sensitive to the increase in mortgage rates, made up just 28% of sales, down from 29% the year before. This cohort usually makes up 40% of home purchases. Investors or second-home buyers pulled back, buying just 16% of the homes sold in October compared with 17% in October 2021.

Mortgage rates are now more than double the record lows seen just at the start of this year. But recent volatility in rates is also wreaking havoc on potential buyers. Rates shot up in June, settled back in July and August, and continued even higher in September and October. Then they dropped back again pretty sharply last week.

"For many, the week-to-week volatility in mortgage rates alone, which in 2022 has been three times what was typical, may be a good reason to wait," said Danielle Hale, chief economist with "With week-to-week changes in mortgage rates causing $100+ swings in monthly housing costs for a median-priced home, it's tough to know how to set and stick to a budget."

Noah Rosenblatt

Talking Manhattan on
Staff member
2023 predictions? Ill throw some out there for fun

- Bear rally starts 2023 off, but doesnt last long
- Manhattan sees relief period in both sales and rentals during this time
- As we get closer to Q2-Q3, I wonder if markets expecting rate cuts (they do now) in 2H of next year dont actually get them. Rates stay higher, longer. As a result, we have a second wave down to ultimate lows. Manhattan and natl housing react accordingly to any risk off sentiment period in markets.
- 2H 2023, I think we see the lows of this cycle in equities and housing and we may even end the year with a light bounce
- Fed Terminal rate ends up around 5%-5.25%, and likely to stay there for longer to contain sticky inflation
- Secular buying opportunities in corporate bonds, equities, housing
- 2024,2025,2026 reflationary years as first wave of inflation dissipates and markets ultimately react to stimulatory monetary policy as the fed ultimately cant steer a soft landing in 2023

David Goldsmith

All Powerful Moderator
Staff member
Lenders should start getting their short sale programs off the ground now before they really need them. Back in the early 1990s I worked with Citibank on their somewhat underground program for NYC Coops (NB this was way before "everyone" became aware of what short sales were post-GFC) and when they could bring themselves to execute it worked out extremely well for them.

David Goldsmith

All Powerful Moderator
Staff member

Housing market to sink to a 12-year low in 2023, Redfin says​

Brokerage forecast lower mortgage rates, home prices​

The housing market has further to fall before mortgage rates deflate from historic highs in 2023, Redfin predicted.
Next year will bring the slowest housing market in a dozen years, the brokerage forecast in its 2023 housing outlook. Existing-home sales will decline 16 percent year-over-year, rounding out at 4.3 million deals, driven by affordability issues from elevated prices and borrowing costs.

The brokerage predicted both prices and mortgage rates will decline next year, at least slightly. The median home sale price to drop by 4 percent, the first annual drop since 2012.
Limited supply, however, will prevent prices from bottoming out further. Homeowners also won’t have to fret underwater mortgages, as most current homeowners are locked in much lower mortgage rates than what the market has dictated in recent months.

Mortgage rates have started to decline in recent weeks, but will land below six percent by late 2023 to close the year around 5.8 percent. The average rate for the year is expected to be around 6.1 percent.

Redfin expects asking rents will continue their decline from record highs reached in 2022 into the middle of the year due to rising supply and continued difficulty for people to buy homes, leading some to rent indefinitely.

Builders will favor construction of multifamily rental buildings in place of single-family homes, which piled up into crushing inventory levels after a rush of construction during the pandemic.
Many of these predictions hinge on the Federal Reserve’s moves in the coming months. The Fed’s decision to start raising interest rates in the spring brought many of the shifts embroiling the housing market, including the hiked mortgage rates of the past nine months.

David Goldsmith

All Powerful Moderator
Staff member
2023 NYC Housing Market Predictions: What Renters, Buyers, and Sellers Can Expect
The NYC housing market experienced some turbulence in 2022. The sharp jump in mortgage rates forced buyers to slash their budgets or stay on the sidelines, while expiring pandemic deals pushed renters into the toughest rental market in nearly a decade.
The transformation of the NYC housing market will continue next year as buyers and sellers adapt to persistently high mortgage rates. Prices and asking rents will decline more meaningfully, but relief in rents will be slower to materialize. If a recession occurs, NYC homeowners will be better prepared to avoid widespread short sales and a precipitous drop in prices.
A rental construction boom has the potential to alleviate rental inventory shortages. With more New Yorkers working from home, under-utilized office space in Manhattan presents a unique opportunity to ramp up the housing supply in the city and 2023 will be a pivotal year in deciding whether those conversions can become a reality. Despite the shifting market this year, the city will continue to attract would-be residents.
Here are StreetEasy’s 2023 NYC housing market predictions.

  1. 1. NYC home prices will fall, but don’t expect a collapse
  2. 2. Renter demand will cool, but a dip in rents will be slow to materialize
  3. 3. NYC homeowners will be better prepared for a possible recession
  4. 4. The rental construction boom will restart
  5. 5. 2023 will be a pivotal year for the office-to-residential conversion debate
  6. 6. NYC will continue to see an influx of new residents

1. NYC home prices will fall, but don’t expect a collapse​

Inflation appears to be slowing but will likely remain above the Federal Reserve’s target of 2% throughout 2023. Meanwhile, current labor market conditions are favorable for job seekers, but labor shortages make it more difficult for the Fed to slow inflation. In September 2022, there were two unfilled jobs per each unemployed person – the tightest labor market in more than 20 years. All in all, the Fed will likely keep interest rates elevated through much of next year.
This means 30-year mortgage rates will remain elevated in 2023. Competition among NYC buyers has slowed due to higher mortgage rates, causing listings to stay on the market longer and sellers to cut asking prices.
However, despite falling buyer demand, the decline in home prices in NYC will likely be limited, as sellers are also withdrawing from the market. The number of new listings for sale fell 17% year-over-year in November, keeping pressure on the still-limited inventory. Would-be sellers will likely remain unwilling to trade in their low mortgage rates locked in before or during the pandemic for today’s much higher rates.
With elevated rents, many priced-out buyers are waiting to rejoin the market if there comes any relief in mortgage rates. Buyers are regaining negotiating power, but seller hesitation will prevent the balance of power from tilting squarely in favor of buyers next year.

2. Renter demand will cool, but a dip in rents will be slow to materialize​

Asking rents rose to an unsustainable level relative to New Yorkers’ earned wages over the summer. Adjusting for inflation, just under half (48.2%) of NYC’s workforce could afford just 10% of the rental inventory available this summer, unless they spent more than half of their income on rent. Due to the higher cost of renting and elevated inflation, renter demand will continue to cool in 2023, pushing down asking rents. This relief in rent prices, however, will be slow to come by due to limited inventory of rental units.
Additionally, priced-out buyers will likely remain in the rental market at least until the 2023 spring buying season, which may keep rents high. Moreover, our research shows that NYC renters are willing to pay up to avoid having roommates, despite record-high rents and potential annual savings of at least $14,500 from living with roommates. All of this means the rental market may take longer to cool down, despite less overall affordability.

3. NYC homeowners will be better prepared for a possible recession​

Should there be a recession in 2023 involving widespread unemployment, NYC homeowners will be better prepared than they were when faced with the last recession in 2008. We predict that a limited number of them would be forced into foreclosure due to negative equity. This is partly because NYC home prices fell nearly every month from the start of the pandemic until July 2021. In 2019, prior to the pandemic, the NYC housing market was already on a course correction. This was in contrast to other parts of the country, where typical home values began soaring in mid-2020 with more people working from home. Although the growth in typical home values in NYC was more modest than the national market, the bulk of homeowners who purchased a home prior to and during the pandemic are sitting on positive equity. This bodes well for NYC homeowners even if home values decline more meaningfully next year.

Moreover, NYC homeowners are on stronger financial footing compared to the 2008 financial crisis. The mortgage delinquency rate in New York state was 2.7% in September of this year, in line with the historically low national rate of 2.8%, according to the latest Black Knight Mortgage Report. Only 0.4% of borrowers in the greater NYC area are in negative equity positions, meaning NYC homeowners are well prepared to withstand a possible economic downturn ahead.

4. The rental construction boom will restart​

Many developers are waiting to take action on new construction projects, which have the potential to alleviate the rental inventory shortage. There was a surge in the number of permits received by developers in the first half of 2022, likely led by developers rushing to qualify their projects for the Affordable New York partial tax exemption (commonly known as 421-a) before it expired on June 15. Based on NYC Department of City Planning data, developers were issued 58,623 permits for new homes during the first half of this year. That’s nearly as much as the total issued in 2015 – the last time 421-a expired – and two and a half times the total permits issued in 2021, when construction activity had mostly normalized after the lockdowns in 2020. Authorized projects must be finished within four years to qualify for the 421-a tax benefit, and offer 25% to 30% of their units as affordable housing at specified household income levels relative to area median income. This means the city could experience a meaningful increase in the supply of market-rate rentals over the next few years. However, it remains to be seen how many of the permitted developments will materialize, considering elevated inflation and borrowing costs.

5. 2023 will be a pivotal year for the office-to-residential conversion debate​

With more New Yorkers continuing to work from home, the market for Manhattan office space is struggling. An analysis by the NYC Office of the Comptroller shows New York City-area office occupancy remains at about 46% of pre-pandemic levels in October. Converting under-utilized commercial buildings in Manhattan to apartments can help alleviate perennial housing shortages in NYC. The recovery of the Financial District following the 9/11 attacks set a strong precedent. One Wall Street, once an Art Deco office tower built in the area in 1930, entered the residential market this year with 566 new apartment units.
It’s important to note that converting commercial buildings into residential developments requires significant investments of time, money, and effort. Large office buildings built in the latter half of the 20th century, mostly in Midtown, can be cumbersome to convert due to challenges with bringing natural light into core units. Conversion of other commercial buildings calls for changes to local zoning laws or even state law – a difficult task requiring coordination between New York state and the city. That said, with today’s sky-high asking rents and the city’s glut of new condos accumulated since 2013 now mostly sold, cooperation at the state and city levels is more needed than ever to alleviate the city’s housing shortage. 2023 will be a pivotal year in deciding whether NYC can deliver regulatory changes to diversify Manhattan commercial districts and improve the supply of affordable and supportive housing.

6. NYC will continue to see an influx of new residents​

Despite high rents, StreetEasy search data suggests the city continues to draw interest from potential new residents wishing to move from other areas. In November this year, rental search volume on StreetEasy originating from areas outside New York City was almost double the level prior to the pandemic, with the Washington D.C., Boston, and Atlanta areas showing the strongest renter interest. Robust interest in NYC rentals from outside the city despite less affordability coincides with the solid recovery of the NYC economy, which by September of this year had regained 97% of the jobs lost during the pandemic, according to analysis by the NYC Office of the Comptroller. In addition to the job opportunities, many NYC neighborhoods continue to find ways to charm locals as well as would-be residents.


David Goldsmith

All Powerful Moderator
Staff member
CRE Predictions For 2023: Distress, Opportunity And Another 'Roller Coaster' Year

After the last three years, there are few real estate professionals brave enough to make confident predictions about what will happen in 2023 — other than to say once again to expect the unexpected.

“We expect 2023 to herald a whole lot more of the same relative to 2022, and by that, I mean it's likely to be a similar roller coaster ride,” Moody’s Analytics Head of Commercial Real Estate Economics Victor Calanog said. “It's not all downs, it's a lot of ups and downs.”

Commercial real estate enters 2023 pointing in the opposite direction as it did a year ago. The Federal Reserve has pushed its benchmark rate to 4.5% after starting 2022 near zero, a rapid change in the state of affairs that has ground sales volume to a standstill and killed deals around the country.

Rents at multifamily and industrial properties have soared this year, but amid the Fed's aggressive campaign to rein in inflation, demand for both has started to come down. More significantly, demand for office space has never approached pre-pandemic levels, and office occupancy is still below 50% of what it was in most large markets.

Meanwhile, predictions of a recession next year — and whether the overheated recovery will end with a hard or soft landing — have intensified. Nothing is predictable these days but something of general consensus is taking place on apartment rents, the U.S. economy, return to office and how the Fed may behave in 2023.

It might not turn into a nightmare year along the lines of 2008 — but it certainly "won't be pleasant," CBRE predicted — and it will likely be defined by what doesn’t happen more than what actually does.

“I think we're in for a tough road,” said Andrew Steiker-Epstein, the vice president of sales, leasing and marketing at New York developer Charney Cos. “I think you are going to see just very low transaction volume, and not a lot of things happening.”

Bisnow spoke to nearly a dozen industry leaders to gather predictions for the year ahead in CRE. Here is what stood out:

The Housing Crisis Won't Abate, Even As Rents Stabilize

Eye-watering rent increases are expected to keep slowing down this year after posting records in 2021 and the beginning of 2022.

The last of the Covid-era discounts will expire in 2023, bringing even more inventory to market, said Diane Ramirez, the chief strategy officer of Berkshire Hathaway HomeServices New York Properties.

"I think there's going to be a lot of turnover of apartments," she said. "That's going to help with supply, and with supply, you might get a little bit of an easing with prices, so I think the rental market is going to just become a little more normalized."

Shimon Shkury, founder of multifamily sales brokerage Ariel Property Advisors, said rental growth will no longer see a rapid ascent, but he doesn't expect it to start coming down because "there's not a tremendous amount of new product that is opening up."

That spells bad news for the tens of millions of Americans who are paying more than 30% of their income on rent. The housing crisis isn't going away next year — and it will likely get worse, Nuveen Impact Investing Senior Portfolio Manager Pamela West said.

“I've seen a ton of numbers quoted from different sources, but we’re somewhere between 6 and 7 million units in deficit of housing,” she said. “If we were to build 100,000 units per year of affordable housing, it would still take us 20 years to catch up to what we need. It's just a ridiculous statistic and the needle moves every year, and so in 2023, it's going to move again, and it's going to move away from us.”

She said housing is a "purple" political issue and is on governments' agendas more than in previous years, but the required urgency is not yet there, and it's unlikely to show up in 2023.

“I don't think we'll go backwards on any policies, but my concern is that we're not really going to move forward either,” she said.

Recession? Maybe. But Distress Is Coming

The predictions on the style of recession vary wildly, from deep to shallow to not coming at all.

“The market really hasn't given up on the possibility that there will be a soft landing, that we're going to avoid a recession,” Calanog said. “We think that the probability of a recession in the United States now lies between 55% to 65% over the next 12 months.”

Goldman Sachs, for its part, has put the chances of a recession at 35%. Almost uniformly, real estate players have arrived at the conclusion that some form of correction will come next year, particularly for deals made at the top of the market last year.

"We're heading to what you refer to as a liquid recession," said Ran Eliasaf, the founder of real estate private equity firm Northwind Group, which has $3B in assets under management. "It's hard to say if we're gonna hit a full-blown recession, or it's just gonna be a milder one, but there's definitely a big correction in pricing as well as valuation. That has to happen.”

Marx Realty CEO Craig Deitelzweig is predicting a “shallow” recession, characterized by companies shedding employees following the hiring spree in 2021. His company has been lying in wait for opportunities to pounce on assets whose owners aren't able to withstand the current market conditions.

Those opportunities have presented themselves in Washington, D.C., he said, but in New York, the “come to Jesus” moment hasn't yet arrived.

“I thought we would see more in New York, but I'm hearing quarter one is when we'll really start to see more of those opportunities,'' he said, adding the firm will continue to look for assets in New York, and in other parts of the country like Atlanta and Austin.

“A lot of debt comes due in 2023, 2024,” he said. “They have debt coming due, and they either don't have the capital to [improve the buildings] or they don't have the wherewithal to do it.”

Northwind's Eliasaf said the bank pullback from CRE lending has already led to some borrowers seeking out debt funds like his for products like condominium inventory loans in New York.

“The quality of borrowers that need financing solutions increased, because they would usually get the solution from the bank and that doesn't exist,” he said. “I think we're going to be very busy 2023 as well.”

A sluggish market makes for a tough time for appraisers, said Grant Norling, a co-founder at Valcre, a software company for appraisal firms, but next year is set to bring more activity for the industry as owners, and their lenders, face challenges with their assets.

“There'll be other aspects of the other sectors of the appraisal industry that start picking up quite a bit,” he said. “Any bank that has troubled assets, or they're looking at pre-foreclosures ... they'll want to be appraising their assets for loan monitoring purposes. So that portion of the industry we anticipate will fire back up.”

Office Usage Will Rise With The Threat Of Layoffs

Leasing activity has increased, but availability is still very high.

Office usage is top of mind for 2023 across the board, with some predicting workers will try to ease their fears about the state of the economy by heading into the office more frequently next year.

“I think part of the reason why the sentiment has been weak [on office] is because a lot of companies have had challenges in fully mobilizing their employees back to the office,” Empire State Realty Trust Chief Operating Officer and Chief Financial Officer Christina Chiu said. “Tech layoffs, maybe some of the financial [firms' layoffs] and how that rolls through the system, especially in light of rising interest rates and economic uncertainty ... I think some of that will make it easier for companies to bring people back and get people more confident about the use of office.”

Deitelzweig predicted office occupancy will jump by 10%, while Shkury said he thinks usage “absolutely” is going to go higher. Steiker-Epstein of Charney Cos. said 2023 is more likely the year office owners accept the workplace is fundamentally altered.

“I think there's going to be a slow trend of people coming back,” he said. "It’s never going to be near where it was."

Calanog took another viewpoint: While employers might demand more workers back at their desks — and some are already doing so — that phenomenon might proved short-lived.

“Would you really feel good about working for an employer that uses the potential threat of layoffs to get you to go back?” Calanog asked. “Yeah, you might comply in the short run, and then guess who's gonna be stepping up their résumé?”

Interest Rates Could Start Coming Down Before Year-End

Last week, the Federal Reserve hiked the benchmark interest rate half a percentage point, hitting its highest rate in 15 years. The targeted range reached between 4.25% and 4.5% — and Fed officials are now forecasting raises to be around 5.25% by the end of 2023.

Real estate has a more optimistic take, however.

“I think that we peaked in terms of interest rate growth — I hope so at least –—and I think that there is some likelihood that we'll see a lower interest rate environment in a year from now,” said Shkury, though he said he can’t predict that with any certainty.

“I think we'll see a pause in March and they start dipping in June,” Marx’s Deitelzweig added.

“There are some who are talking about the possibility of rates coming down next year … There's a number of folks in the last few weeks who are entertaining that possibility, giving a greater probability to that happening than they were weeks before,” Trinity Place Holdings CEO Matt Messinger said. "I am certainly more optimistic about the possibility of potentially opportunistically being able to refinance certain debt obligations at the tail end of ‘23.”

Industrial Down, Retail Up

Industrial real estate, long the darling of the industry, could be facing a challenging 2023.

Turnbridge Equities Managing Principal Ryan Nelson said the sector is suffering from lack of available space and limited new construction coming online.

"This stagnation can be attributed to the current and impending capital market dislocation we are seeing and this will further exacerbate supply chain delays as industry players navigate finding space," he wrote in an email. "From a developer’s standpoint, higher interest rate and the potential for a recession will threaten prospective industrial developments."

Speculative construction has been the norm — of the record 700M SF of industrial space under construction in the middle of 2022, just 26% was pre-leased, according to Cushman & Wakefield. But while future development is still needed, construction will be limited "due to capital market dislocation and distress," Nelson said.

But in a complete reversal of fortune, there is a growing sense that the worst is over for the embattled retail market.

“The pessimists all said it would take years for the New York retail market to recover from the pandemic, but the numbers don’t lie," Patrick Smith, who is vice chairman of retail brokerage at JLL in New York, wrote in an email. "By the close of 2022, we expect the number of retail leasing transactions this year to surpass that of 2019 and mark a return to normalcy as we go into the new year."

Sublease space dropped nearly 11% last quarter and leasing velocity was up 7.4% year-over-year in Manhattan, per the brokerage.

"It seems that lenders have become more positive on retail, along with some buyers, under the notion that they've been downside-tested on multiple fronts: Covid-tested, internet-tested, e-commerce tested," Chiu said.

David Goldsmith

All Powerful Moderator
Staff member
I guess kind of "predictably" (LOL) brokers/agents say "It's a great time to buy" and recommend the opposite of what they've been advising everyone (older, smaller, less renovated).

What Should New York Homebuyers Expect in 2023?​

Noble Black, a broker at Douglas Elliman, keeps getting calls from New Yorkers looking to buy an apartment. They all tell him the same thing: that they’re kind of, sort of looking and to call them if he spots a place at a great price that checks all of their boxes. Great, he thinks, I’ll just add you to the list. “I’ve got a list of 50 people like that,” he says, but there’s a problem. “The market is not dead. This is not the market where sellers are having to fire-sale.”

After a year like this one, buyers are desperate for some good news. If you wanted to buy a home in New York, or really almost anywhere, 2022 kept getting worse — home prices soaring, hitting a record $1.25 million median for a Manhattan apartment just before mortgage rates rose to highs that this generation of buyers hasn’t seen (7 percent interest for a 30-year fixed-rate mortgage, anyone?). More recently, rates have fallen slightly to 6.31 percent and prices for Manhattan apartments started falling too. But, as Black says, this is not the beginning of a bigger shift. What many realtors, economists, and mortgage lenders agree on is that there may be a window at the beginning of next year to buy a house at today’s rates (or as rates potentially slide later in 2023). But barring a catastrophe (like an all-out recession), the odds of getting a home at a “fire-sale” price are slim to none.
Some realtors, however, are still trying to make 2023 happen. “It’s the best time to buy in the next three years,” Mihal Gartenberg, a broker at Coldwell Banker Warburg, is telling her clients. The way she sees it, interest rates will go up in the spring, but some sellers are desperate now — like the backers of new developments who have started throwing her clients free storage and parking: “all the bells and whistles,” she says. Jeremy Kamm, another broker with Coldwell Banker Warburg, agrees. He had to bring down the price of a Brooklyn Heights duplex by 5 percent this fall before it sold and sees next year as “an opportunity for buyers to jump in knowing there’s less competition, knowing sellers are worried about their listing lingering.”

But most sellers are probably not going to make dramatic moves in 2023. Things have already slowed down significantly this year. In Douglas Elliman’s November report, Jonathan Miller’s firm counted fewer than half the number of homes for sale that there were in November 2019. The appraiser sees two reasons for this: Sellers don’t want to give up a low mortgage rate for a higher one, or they just sold their home in the boom. “Because rates were so low for so long, that inventory was wiped clean,” explains Miller, so those thinking about selling have the luxury of time. “It takes about 12 to 24 months for a homeowner to capitulate to market conditions without feeling like they left money on the table.” He believes that when outside factors like higher mortgage rates push down demand, prices don’t fall quickly. And right now, prices are buoyed by this problem of low supply.
Still, StreetEasy sees listings staying up longer and having their prices cut more often. In November, for the first time since 2019, listings stayed up for 75 days on average before going into contract, and their prices were cut more often than in November last year. As for next year, Miller sees “zero change” in prices but thinks interest rates will fall to a place where buyers can stomach the numbers — just below 6 percent. Rich Sharga, executive vice president of market intelligence at ATTOM, predicts the same thing: home prices plateauing in New York City and the mortgage rate edging down slightly to above 5 percent. That will help some New Yorkers make the leap to buy a place. Meanwhile, Sharga thinks buyers will readjust their expectations in other ways: “Those prospective home-buyers are now maybe looking farther outside the metro area, smaller places, older places, trying to figure out what they can really afford.”

This is exactly what some realtors are encouraging their clients to do. Leonard Steinberg, an executive at Compass, says buyers need to stop looking for trendy interiors and start looking for good bones. “I call it the Calacatta-marble insanity,” he says. “It’s almost like they’re looking at a home the way they’re looking at a minidress.” Deborah Rieders, a broker at Corcoran who specializes in townhomes, says that even this fall, her clients were making what she considered high offers for renovated properties and still getting outbid. So she has been showing them that there’s value in fixer-uppers. “I think you can get those houses at a slight discount right now, because people are afraid of doing work,” she says.
But most New York City home prices are still a fantasy for many residents, and the city has been trying to change that in drips and drabs, first, by increasing supply: This year, the city’s Housing Authority is building 18 homes in Brooklyn and Queens, financing an affordable co-op in Chelsea, and funding a task force to push so-called “zombie” homes back into the market. Meanwhile, the city’s Housing Preservation & Development department is trying to boost buyers, spending a record $9 million on $100,000 forgivable loans. Do the math, and that’s just 90 families.

More recently, the mayor, governor, and council speaker released grander plans that may make a difference in the long run. This month, the mayor announced a “moonshot” to build half a million homes over the next decade — more than twice as many as New York added over the last ten years — in part by rezoning a swathe of the Bronx near two planned Metro-North stops to allow for 6,000 new homes. Another rezoning plan would turn the light manufacturing wedged between rapidly gentrifying neighborhoods along Brooklyn’s Atlantic Avenue into mixed-use developments that could include apartments. Governor Hochul backed the plan saying, “We will need every community, every town, and every city to do its part to make housing accessible and affordable for all.”
Those kinds of announcements might come across as empty politicking, but to people who have been pushing this line for years, they are somewhat of a shock. “The fact that the city and the state are in political alignment, and both focused on housing, is quite unusual,” says Sarah Gerecke, a fellow at the Housing Finance Policy Center. “There may be a lot more support for some of the changes it takes to have more people housed.”

Still, those plans will take years to build. And New Yorkers are ready to buy now. “I still think there’s pent-up demand from people about to purchase in the spring who were thwarted by the spike in rates,” says Miller. That demand doesn’t just come from New Yorkers but from everyone who wants to become a New Yorker, which means that even if prices fall nationally next year, they might not fall here.
Black, the Elliman broker, thinks what will probably happen is buyers will cave first. “Eventually, people get used to higher rates. Tired of waiting, something comes on that excites them,” he says. In short, for buyers who aren’t priced out, they will give up their real-estate fantasies and settle for less to do what so many have done before them: stretch their finances thin to afford a sliver of reality — maybe a postwar shoebox with a view of a brick wall but, preferably, one with good bones.


David Goldsmith

All Powerful Moderator
Staff member

Residential market New Year’s outlook: Once-hot market is old acquaintance​

Forecasts call for declining sales for 2023​

When we asked in this month’s edition of the magazine, “What the hell is happening in residential real estate?” The evidence pointed to one irrefutable answer: not a whole lot of good.
Indeed, November brought a tsunami of bad news from some of the residential industry’s biggest players in the U.S., from Redfin to Opendoor to Compass.
Unsurprisingly, year-end figures and 2023 projections released recently — amid economic uncertainty, inflation and high interest rates that at one point saw 30-year fixed mortgage rate surge past 7 percent — are yielding the same answer.
Home sales dropped a little more than 35 percent year-over-year in November, Redfin reported last week — the largest drop recorded by the brokerage since it began tracking sales 10 years ago.
In addition, the median home sale price increased by only 2.6 percent from a year earlier, while new listings dropped a staggering 28.4 percent percent year-over-year, according to Redfin.

The slowdown has hit pretty much everywhere, including Manhattan’s once-white-hot luxury market, which opened the year with strong sales, only to approach the turn of the calendar with just 468 contracts for homes asking $4 million or more, a decline of 44 percent, in the second half of 2022.
In’s 2023 housing forecast, Los Angeles (94), San Francisco (90) and Miami (70) all ranked near the bottom of the country’s largest metro areas.
But there were some silver linings amid the doom and gloom.
The 30-year fixed mortgage rate has receded to about 6.5 percent, giving some hope for a recovery.
At street level, Elliman, despite a $4 million loss last quarter, continued to expand its operations with the announcement of a second office in Boston through the acquisition of Bulfinch Boston Realty.

Elliman’s Eklund-Gomes Team this week signed a five-year deal to re-commit to the brokerage. The 90-person team led by Fredrik Eklund and John Gomes has reeled in more than $4 billion in transactions across Elliman’s 13 markets, the brokerage said.
That’s on top of Elliman’s announcement last month that it was opening three offices in the metro Washington, D.C., area.
And some appear to retain an overriding optimism about a seller’s market at the high end–perhaps thanks to rose-colored glasses. Billionaire casino mogul Steve Wynn has nearly $300 million in properties listed right now spread out in New York City, Sun Valley, Idaho; Beverly Hills, California; and Palm Beach, Florida.

Still, the prognostications don’t look for a particularly strong 2023 on the residential side.
In its 2023 housing outlook, Redfin says next year will bring the slowest housing market in 12 years.
“This has been a generationally bad year in residential real estate, one of the worst years over the past several decades,” Compass CEO Robert Refkin said in a Compass earnings call in September. “ The incredible speed of the decline has been historic. Transactions have fallen significantly as soaring mortgage rates, high home prices, lack of inventory, stock market declines and high levels of uncertainty are keeping many buyers on the sidelines.

“The past 12 months have been tough and the next 18 months appear that they can be tougher.”


Well-known member
“This has been a generationally bad year in residential real estate, one of the worst years over the past several decades,”
Is it just me, or has society been dumbing down the period of time associated with “generational” of late? It’s been 14 years since the 2008 cycle. While it is true that one of my grandmas (proudly) claimed to have her first child at age 13 in the old country, does 14 years really align with anybody’s sense of a generation these days, if ever???


Well-known member
When looking for travel accommodation, I like to read 1-star reviews of otherwise well-reviewed hotels that don’t end up in the top-10.

A recurring theme: “We didn’t stay at the hotel, but we ate at the restaurant. The food was good and the table service was fine. But when my kids started running around the pool making a ruckus, they asked us to rein them in. Totally rude and inappropriate, especially at the sort of place that charges $25 for a lousy club sandwich! 1 star.”

Or: “We didn’t stay at the hotel, but because everyone said it was so great we tried to eat at the restaurant. We didn’t actually eat. We showed up without a reservation, but they told us it’d be a 2-hour wait even though they had empty tables right there! Their excuse was that the tables were for hotels guests who had reservations. But really, I think it’s because they’re snobs, and we didn’t fit their elitist profile. 1 star.”

Or: “Didn’t stay here, but we went to see it as it’s supposed to be a magnificent tiny hotel. We drove the whole extended family 30 minutes to get there, but upon arriving and explaining that we were just there to take a tour, we were turned away! They said that they didn’t allow non-guests to wander around so as not to disturb guests. I told them that’s not on their website, which they acknowledged, and that we drove 8 adults and 6 children a whole 30 minutes on a minibus to get there. They said they wished we had called first but turned us away! 1-star.”

I even recall a 1-star review from some idiot who had driven to tour a hotel unannounced, only to find they had a planned closure for the week for maintenance.


Well-known member
Speaking of the word generational, when “generational wealth” enter the lexicon, and when did it become acceptable to gripe about not having it? “It is tough because I didn’t grow up with generational wealth.” Really??? It wasn’t enough that your immigrant parents uprooted their lives, established themselves in a new country, and put you through college? It’s the missing million dollar check that’s really holding you back….

David Goldsmith

All Powerful Moderator
Staff member
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Daily Dirt wraps up real estate’s year​

From cannabis to Compass, 2022 was a time of changing fortunes​

Cannabis sellers opened up shop. Mortgage rates climbed. The rental market went crazy. A unicorn went into survival mode. Some companies got real about their office footprints.
Those are just a few real estate-related highlights of 2022. They are also among the top stories to watch in the year ahead.
Since the onset of the pandemic, the future of the office market has been a big question mark. Early on, industry professionals insisted that the market would roar back once Covid subsided. This viewpoint was bolstered by some tech companies that inked leases for outrageously large office spaces and doubled down on plans to develop new office buildings.
But in 2022, facing ornery investors and the threat of a recession, tech companies cut spending, laid off employees and shed office space. Office landlords remained optimistic, but with an asterisk, which clarified that old office buildings were more or less doomed while flashy new ones remained in demand.

In 2023, elected officials are expected to push for more office-to-residential conversions, and the market for ground-up development is expected to remain bleak. Over the next few years, we will see if demand for high-end office will be enough to justify the volume of new development in the pipeline.
Vornado Realty Trust’s plans for office towers surrounding Penn Station — as well as the state’s plans for the station’s expansion and renovation — will almost certainly be part of that story. Vornado CEO Steve Roth recently cast doubt on the viability of moving forward with the project now, though he said he remains committed to it. I can see the office-to-housing ratio of the Penn project shifting further in favor of residential.

Meanwhile, rising interest rates wreaked havoc on the residential market. Mortgage companies and real estate brokerages laid off a ton of workers. Would-be home buyers flooded the rental market, further driving up demand in a market that already had limited supply. In May, the median rent in Manhattan reached $4,000 for the first time. It continued to rise before stabilizing in the fall. And by stabilizing, I mean it continued to hover around that very-high figure.
The housing market appears to have a rough road ahead. Redfin recently predicted that the housing market in 2023 will be the slowest in 12 years. The firm expects 16 percent fewer sales of existing homes than in 2022, and for the median home price in the U.S. to drop 4 percent. The firm also projects that the average mortgage rate in 2023 will be 6.1 percent.

It was also a tough year for iBuying. Zillow was the first to abandon ship in late 2021, and since then, Redfin has also shut down its iBuying business, while Offerpad and Opendoor struggle to survive.
Speaking of survival, Compass, after reporting $101 million in losses during the second quarter, announced that it was cutting costs by $320 million and ending its agent equity program. The company is now laser-focused on profitability.
At the start of 2022, Gov. Kathy Hochul announced a series of housing and real estate-related priorities, but nearly all of them quickly fizzled out. The fact that it was an election year helps explain things like the death of a proposal to force localities to legalize accessory dwelling units, which critics turned into a debate over local control of zoning. Long Island Republicans framed the issue as an end to single-family homes.

Hochul is expected to revive some version of this measure along with other failed proposals, including one that would lift the cap on the city’s residential floor area ratio.
The property tax break 421a expired in June, after the governor’s replacement program, 485w, failed to go anywhere. At this point, it is unclear if this issue will be resolved in the year ahead. Some industry folks have told me they are not holding their breath.
There were also some wild political moments in 2022 that — of course! — had a real estate angle. Lieutenant Gov. Brian Benjamin was indicted on bribery and corruption charges, stemming from his relationship with little-known developer Gerald Migdol. Some of the charges have since been dismissed.

Eric Ulrich resigned as the head of the Department of Buildings in November after news surfaced that he was questioned by the Manhattan district attorney’s office as part of a gambling probe. It can take months to find a permanent buildings commissioner because the job is demanding, thankless and not especially well paid. For now, Kazimir Vilenchik is holding down the fort as acting commissioner.
And then of course, there is the newly-elected member of Congress who…pretended to be a landlord?
And closing out the year, the first legal cannabis store opened at Manocherian Brothers’ 750 Broadway in Noho on Thursday, though illegal retailers popped up long before that. This will surely be a retail space to watch in the year ahead.

David Goldsmith

All Powerful Moderator
Staff member
Layoffs, sluggish markets signal rough start to 2023

Most indicators point to more of the same in the first quarter​

The sky isn’t falling as we enter 2023 when it comes to real estate, but there aren’t a whole lot of rainbows up there, either.
A number of stories last week point to the year shaping up to be a rough one.
Compass, the No. 1 residential brokerage firm in the U.S. in terms of sales volume, announced it’s subletting its corporate headquarters — with its agent-facing offices to remain open — while also engaging in its third round of layoffs over the last year.

In New York, the residential and commercial markets had a rough fourth quarter. Tight inventory and high mortgage rates squeezed residential sales in Manhattan, leading median sales prices of condos and co-ops to drop 5.5 percent.
The Manhattan office market didn’t fare any better, with leasing in the borough plummeting 43 percent year over year in the fourth quarter, as tenants took just 4.9 million square feet in the final three months of 2022, the lowest quarterly total since the second quarter of 2021.

Things appear to be rough all over. Home prices across Southern California have slipped for the sixth straight month, the result of increasing monthly mortgage rates.
Los Angeles’ sagging market doesn’t expect to improve any time soon, with a new transfer tax set to go into effect in April that’s expected to have a widespread impact on the city’s luxury residential market, and its commercial sector as a whole.

The market shift has been felt in formerly white-hot areas like Miami, where inventory is ticking upward and brokers are advising clients that the pandemic boom times are over.
In the Midwest, sales of Chicago-area homes priced $1 million or more dropped by more than 35 percent in the last quarter of 2022 compared to the same period the year prior.

Overall, pending U.S. home sales during the four weeks ending Jan. 1 dropped 32 percent from the year prior, the lowest level since at least 2015, Redfin reported. Austin, Texas, joined Las Vegas and Phoenix as the municipalities seeing the biggest declines of more than 50 percent.
Not that everything is doom and gloom. Thad Wong, of @properties, Chicago’s largest independent residential brokerage, said in “The Closing” interview for The Real Deal’s January issue, that his firm is expanding.

And one person’s down market is another person’s treasure. Firms like Maverick Real Estate, which was also profiled in this month’s issue, that deal in distressed debt — particularly one as aggressive as Maverick — can thrive in this environment.
Of course, no one has a crystal ball as to what the rest of the year will look like, and there’s still plenty of time for a turnaround, especially with a traditionally strong spring market on the horizon.

David Goldsmith

All Powerful Moderator
Staff member

Median sales price for Manhattan apartments slipped for the first time since the pandemic began​

  • Condo median sales price dropped 5.9 percent to $1,647,500, co-ops were down 1.9 percent
  • The number of sales in the fourth quarter fell 28.5 percent compared to the previous year

The number of Manhattan apartment sales in the fourth quarter of 2022 fell 28.5 percent year over year, but was 5.9 percent higher than the last quarter before the pandemic.

Many co-op and condo sellers failed to get the deal they wanted in the fourth quarter of 2022 as the median sales price for Manhattan apartments slipped year over year for the first time since the pandemic began.
The combined median sales price for Manhattan condos and co-ops was $1,100,500, down 5.5 percent compared to the previous year, according to fourth quarter Manhattan sales data in the latest edition of the Elliman Report.
Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report, says the findings are further proof that the Manhattan real estate market is reverting to a more normal pattern after a sales frenzy during the pandemic.

It's important to remember that the sales market in 2021 was supercharged, and that distorts year over year comparisons. Although the median sales price for co-ops and condos was down in the fourth quarter compared to the fourth quarter of 2021, it’s actually up 10.2 percent compared to the pre-pandemic fourth quarter of 2019. Similarly, the number of apartment sales in the fourth quarter of 2022 fell 28.5 percent year over year, but was 5.9 percent higher than the last quarter before the pandemic.
Likewise, listing inventory in the fourth quarter was up 5.1 percent year over year but up just 1.8 percent compared to 2019 levels.
Pro Tip:
Did you know you can receive a buyer’s rebate from your broker? Buying with Prevu you’ll pocket a rebate of two-thirds of the commission paid to the buyer’s broker at closing. On a $1.5 million condo, you’d receive up to $30,000.

Buyers and sellers both have to compromise​

Hesitation by sellers in the fourth quarter of 2022 was matched by uncertainty from buyers. The fourth quarter market report from Corcoran notes how, in the face of higher mortgage rates, inflation, and economic uncertainty, buyers adjusted their budgets downwards and sellers had to become more negotiable. “As the market transitions, sales continue to be influenced by buyers playing wait and see, leading to slower movement in supply and pricing,” says Ryan Schleis, Corcoran’s senior vice president of research and analytics.
Miller says one of the reasons the median sales price dropped is because the average size of new development units fell sharply—with buyers of brand new apartments opting for smaller units.
According to the fourth quarter data, the average square footage of apartments sold in new development was 1,320 square feet, which is 9.4 percent smaller than last year. This resulted in average price per square foot going up by 2.9 percent year over year to $2,415 but average and median sales price going down.
The median sales price for new development in the fourth quarter was $1,981,794, down 10.9 percent compared to the same period last year. Serhant’s Manhattan new development market report for the fourth quarter identifies how contract prices for condos with two or more bedrooms all decreased, while smaller studio and one bedroom apartments saw prices increase.
The fourth quarter Manhattan sales report from Coldwell Banker Warburg notes how smaller properties sold much faster than larger, more expensive ones.
The market slowdown might indicate buyers have some leverage. Miller’s advice is a bit more circumspect: Get ready for disappointment in 2023, he says. “Sellers are going to be disappointed that they are not going to achieve the pricing they might have a year ago and buyers are going to be disappointed that prices aren’t going to correct in a significant way because inventory is still low.”
The analysis of the fourth quarter data in the market report from Bond New York notes that while 2022 finished with considerably less pending sales than it did at the start, “the reality was this kind of activity was never sustainable.”

Buyers get a bit more time to shop around​

The months of supply—the number of months it would take to sell all available inventory—was 7.7 months in the fourth quarter of 2022. The 20-year average for Manhattan is 8.5 months so the market is still moving faster than long term norms but is clearly slower than it was a year ago. During the supercharged pandemic sales market, the months of supply fell close to 5 months.
“The market pace is slowing down so what you have is a modest growth in inventory and a sharp drop in sales,” Miller says.
The median price for Manhattan condos in the fourth quarter was $1,647,500, down 5.9 percent compared to the same period in 2021. Although condo sales fell sharply year over year, they still remained above pre-pandemic levels. For co-ops, the median sale price in the fourth quarter was $784,547, a 1.9 percent decline year over year.
The fourth quarter Manhattan sales report from Brown Harris Stevens identifies the Upper East Side as having the largest share of co-op and condo resales, with 23.8 percent. The second largest percentage share of resales in Manhattan took place south of 14th Street with 20.3 percent of deals. The fourth quarter Manhattan sales report from Serhant notes more buyers returned to Midtown neighborhoods, which were some of the areas most hammered during the pandemic shutdown.
According to the fourth quarter Manhattan sales report from Compass, the Upper East Side saw an 8.2 percent increase in contracts compared to the previous quarter. The report also notes that condos fared the worst in the fourth quarter, with signed contracts sinking 53.5 percent year over year and 20.9 percent compared to the third quarter of 2022, while co-ops fell 37.0 percent and just 0.7 percent, respectively.