Is The Market Headed Lower Still?

July was a busy month for me.  By now, we have been talking about the softening market for well over 2 years.  Everyone is aware of the buyer’s market we are in.  Prices in Manhattan are 5-10% lower from their peak levels in 2015.  Buyers have all the power to pick and choose, take their time, and negotiate.  The Brooklyn and Queens markets have not slowed down nearly as much.  Last week, on average 2.9 parties visited an open house in Manhattan, but 6.2 parties visited an open house in Brooklyn and 7.5 parties visited a Queen's open house!  (credit: Halstead).

Is the market headed lower from here still?  Abundant new construction inventory, rising rates, and new tax laws are the catalysts for this soft patch we are in.  We are 7 months into this new world with higher rates and higher taxes.   Buyers gradually come to realize the benefits of long-term home ownership outweigh the cyclical nature of these 2 factors.  However, the impact of oversupply is real.  The market will continue to be soft until the new construction supply is absorbed.  The Absorption Rate, which measures the amount of housing supply in the market, is at its highest level of 8.9 months since the recovery began in 2012.  The ratio of listed homes vs. in-contract homes is also at its highest level since 2012.  But, more homes went into contract and closed compared to last June.  A strong underlying economy and lack of leverage in the system (I have not done a deal with less than 20% down and many are well over 20% down) give me confidence as the market continues to seek direction.

How To Break A Lease

https://www.brickunderground.com/blog/2010/12/how_to_break_a_lease