What’s Next?

After a rebound of sorts this fall, the city’s contract-signed numbers are about 25% higher than this time last year. However, as of late, there seems to be a slight wait-and-see approach taken by buyers (and sellers), partly due to interest rate fluctuations and next week’s presidential election. That said, the 2024 fall season as a whole has been much more robust than the past couple of years. Another contributor is the lower-than-normal inventory levels. Overall, city inventory did not exceed 7,000 homes this year. At the time of this article, there are 6,856 listings on the market ready to be sold. Historically, most fall markets see an increase in inventory well over 7,500 total listings. With the low inventory and elevated contract-signed rates, the city’s real estate foot soldiers — the agents, brokers and salespersons representing buyers and sellers — could definitely feel the increase in activity.

However, the increased activity didn’t create a true seller’s market! The uptick did not give sellers license to start raising prices closer to 2015-2016 levels, which was the last time homeowners enjoyed a full-fledged seller’s market. Today’s busier-than-usual conditions didn’t even eclipse pricing seen during the COVID rebound markets of 2021. Instead, this year's fall market experienced a slight uptick in activity. Nothing more. However, because it’s been so sluggish for the last 24 months, any increase in activity felt like a breath of fresh air, and all of us felt far busier than we have been since interest rates rose in the summer of 2022.

The swell in activity was felt primarily in the lower price end of the market, generally at about $2 million and below. That’s no surprise, as buyers in that sector tend to be much more cognizant of and reliant on interest rates. As a result, it’s no surprise the decrease in interest rates coupled with strong pent-up buyer demand created an uptick in buyer movement. And when interest rates, for a brief moment, dipped below 6%, buyers came back to the marketplace and put property under contract.

But what’s in store? That is the question moving forward, regardless of who takes office, Republicans or Democrats. The city’s real estate market needs lower interest rates to start fueling the very evident amount of pent-up buyer demand. Sellers also need to participate in this comeback as buyers need inventory to choose from in order to start putting more property into contract and create a more sustainable recovery. All this needs to happen before there’s any talk of a “seller’s market." Meanwhile, the recent uptick is a welcome sight for many brokers who’ve been pounding the pavement with their buyers or laboriously selling units that took months, if not years, to sell.

Looking ahead, the economy remains strong enough, but only time will tell if that continues under the newly elected administration. Interest rates should start to go down further, but only time will tell if the Fed agrees with lowering the interbank rate and passing those savings onto consumers in the way of reduced interest rates across the board.

So, What’s Next? Only time will tell!