The New York City real estate market saw a surge in activity in the first quarter of 2024, with an increase in transaction volume across all categories. Large co-op sales also saw a rise, with eight of the twenty-five contracts executed for $4 million or more in Manhattan during March’s 3rd week. While most sales still fall in the $4 million to $10 million range, some sales in the $20 million range were also reported. However, the volume of sales in this demographic has slowed since 2021, with a decrease in the number of really big condo buyers in town.
The Brooklyn market remains strong, with prices for houses in gentrified neighborhoods reaching as high as $10 million. The housing boom in Brooklyn continues to move south, with smaller houses in neighborhoods like Prospect-Lefferts Gardens and Midwood now asking for $2 million or more. Multiple bids and overbids have returned to the market, especially for properties that are properly priced. While some larger units priced above $10 million remain on the market for months or years due to unrealistic pricing, others are selling in thirty days or less with multiple competing offers.
Condition remains a crucial factor for buyers in the current market, with supply chain issues affecting access to renovation materials. Homeowners are choosing to renovate rather than move, holding onto their cheap mortgages. Buyers are reluctant to invest time and money into upgrading dated properties, leading to a lack of interest in properties in poor condition. Aggressive price incentives are needed to attract buyers to these units and facilitate a quicker sale.
The National Association of Realtors settled a class action lawsuit regarding buyer-side commissions in the middle of the quarter, with most major brokerages having settled earlier. The implications of this settlement for the New York City market are expected to be minimal, as commissions have always been negotiable and the listing service never required the inclusion of buyer-side commissions. Despite higher interest rates, the national economy has continued to add jobs and the stock market has remained strong throughout the quarter, with no sign of a predicted recession.
Looking ahead, more inventory is expected to enter the market in April, with buyers ready to make purchases as long as properties are priced correctly. The spring selling season has opened strong, and New Yorkers have a limited tolerance for delayed gratification, leading to continued activity in the market. However, the upcoming Presidential election may slow market activity in the latter part of the year. Overall, the New York City real estate market remains active and robust, with buyers and sellers navigating changing conditions to make successful transactions.