October’s Tricky, Spooky, Scary Mystery Real Estate Market

Boo! I didn't mean to scare you. It was just October's scary Manhattan and Brooklyn real estate sales market!

This attempt at levity may not be all that funny to anyone actually trying to navigate current sale conditions. Everything is challenging, from pricing properties to negotiating deals for both the buyer side and the seller side.

The overall numbers suggest that inventory is down roughly 500 units from historical norms. We ended October with 7,323 listings when typically there are about 7,700 homes available. We also finished the month with just over 750 contracts signed, when historically, there are over 900 listings under contract at the end of October. Scary!

So, what could be contributing to all of this spooky behavior? Interest rates, for one. I have seen commitment letters over 8.5%! With interest rates like that, buyers are getting spooky with their offers, suggesting that sellers buy down their interest rate a point or two while also providing bids 10% under the asking price! These are truly gruesome numbers for most sellers.

While the rental market has been strong through most of this year, it's been relatively dead lately. The slight reductions that landlords are forced to offer bring renters back to the negotiating table, undermining the high interest rates and mortgage payments that would be expected for most purchases. In other words, rents are currently lower than mortgage and HOA fees. Now that's frightening!

But never fear! There are pockets of optimism in this market. Activity continues to pace well above the most severe NYC real estate market circumstances we've seen in recent years. Depending on where sellers decide to list their homes, zombie buyers are still hungry for fresh meat in the way of well-priced properties, and those zombies will go after that meat with everything they've got. Case in point: I had two bidding wars in Manhattan (the first one in nine months) because the sellers decided to price aggressively, and they ultimately ended up selling the home right where they wanted to list initially. A trick that leads to a treat! :-)

So, while it was a scary October, there were signs of life here and there. But mostly, it was an elusive, tricky, and mysterious market. Hopefully, one that won't be replicated in November!