Pockets of Interest, Areas of Hesitation

The Manhattan real estate market is acting funny. While pockets of strong buyer interest are definitely driving multiple bids on some properties, other listings are languishing. Spring 2024 is being called a sideways market by many at this point.

Spring inventory this year is similar to years past. There are currently about 7,100 listings on the market in Manhattan. In a typical spring, we’ll see approximately 7,500 listings by mid-June. So, there’s no issue with supply. The problem seems to be with demand. But what makes this market so intriguing is the evidence of strong buyer interest. Depending on the property, the location, and, above all, the price, some listings are getting into contract in 30 days or less with multiple bids. However, buyers are still generally moving through bidding wars with their hands guarding their wallets. Yes, we’ve seen some multiple-bid scenarios, but not many over-asking prices. Listings drawing the most attention have that special “something,” including an attractive price. Even those homes seeing a massive response are taking 45-60 days for the seller and a buyer to settle on price when it would only take a week in a typical spring market!

In-contract listing activity is forming a zig-zagging line, with one week hot and the next week not. Typically, we’d observe close to 400 units going into contract every week during spring. But this year, that figure has been generally hovering around 200 to 230 listings per week. That could be an issue come this summer.

Many blame the Fed and the talk of little or no interest rate reductions. Some say it’s the elections that are ramping up. Whatever the reason, the fact remains that it’s shaping up to be a listing-heavy market, which will put a strain on sellers and pricing. However, New York City sellers have been resistant in the past to lower prices as many don’t actually need to sell. They would like to sell, if they get their bid, but many have the wherewithal to stay in place until the market improves, which can create a gridlock or standoff between sellers and buyers.

I think things will open up later this spring, and buyers will still come to the sales table as the rental market ramps up and rents increase. If buyers are not at the closing table, they’re signing leases. And when they sign leases in great numbers, it could make for a reverse flow back to the sales market, particularly if interest rates start to inch down later this spring/summer. As this situation unfolds, there are a lot of good opportunities for buyers to hit bids today if they are so inclined.