The 2022 Year in Review
(All in all, not too bad!)
All things considered, 2022 turned out to be better than many would have thought, but it was definitely “front-loaded,” with the majority of deals signed and closed in the first six months of the year.
Throughout the year, The Hoffman Team saw the same trend as the overall New York real estate market. As of Dec. 23, we had closed 104 deals with another 14 units in contract and ready to close in early 2023. However, between January and June 2022, we signed about 76% of those contracts, with the remainder signed from June to December. So, deal activity was definitely front-loaded. Overall, this gave the market a false sense of security. It would’ve been a seriously doom-and-gloom year if the hyperactivity of 2021 didn't carry over into the first half of 2022.
The luxury market saw the same activity trends. By the last half of December, there were 1,304 contracts signed for $4 million and up in Manhattan. There were 836 signed contracts (64%) in the first half of the year compared to 468 (36%) in the second half. (Thank you to Olshan Realty for their luxury market report every week!)
So, activity both overall and in the luxury sector deteriorated after June 2022 under spiking interest rates and a declining stock market, which is now down 20% year over year. But there’s hope! The Hoffman Team put 11 properties into contract in November alone, and we have over 15 accepted offers at the time I write this newsletter. I think the first half of 2023 will be busy. Interest rates that are flat or gradually descending, an extremely hot rental market and low inventory should give the market a floor moving into early 2023. Beyond that is anyone’s guess!
At this point in my annual review, I usually consider year-over-year metrics, but because of the hectic and frankly erratic last three years, it’s almost not worth doing so. The Hoffman Team’s deal volume for 2022 was $129.82 million compared to $183.95 million in 2021. The pandemic year (2020) saw sales volume of $67.36 million. As you can see, the ups and downs of recent years can’t predict things to come. Because of this volatile annual data, these metrics don’t really count this year, but they’re interesting to look at, and the financial markets like to base their analysis on them. I think it’s misleading.
All in all, it was a good year. Some months/weeks were dreadful, and others were strong. Generally, the real estate market mirrored interest rates and the stock market — it rebounded when rates fell or the stock market rose. There will likely be more turbulence in 2023, as many pundits predict. But what doesn’t change is The Hoffman Team‘s dedication to our clients and leading real estate transactions with your best interests in mind. That’s our number one asset and enduring promise.
Thank you so much for a wonderful year. We look forward to serving your real estate needs in 2023.
