It's July and Q2 is behind us. The biggest news this week? Buyer’s market is here again. Prices have gone down this quarter, reflecting sellers adapting to current market conditions. The average price this quarter was just under $2M and the current PPSF is $1,411 which is 1% up from last month.
Over the last week of June, contract signed activity defied seasonal gravity and came in stronger than usual. This week’s contract signed activity is coming in lower than where it should be in the first week of July. And this right here is the story of the market over the past 3 months: it has been reacting in waves to the economy.
Inventory this quarter was still low but somewhat improved, which propelled more buyer activity. In fact, 45% more sales were recorded than in Q1. Part of this rising inventory is also due to more apartments that have been staying on the market longer. This, too, drives sellers to compromise when an offer finally comes in, but not by much.
The average amount of time it will currently take us to clear all existing inventory if no new listings were to come in is 7.7 months; anything higher than 6 indicates a buyer’s market. With the gap finally narrowing between buyer and seller expectations, more deals are closing. Days on the market have also declined from last month and are now at 67.
Areas with more perceived value, such as Midtown East, including Murray Hill and Kips Bay, performed well, with a 15.2% increase in sales compared to the previous year. The Upper East Side also saw growth, with a 12.7% increase in signed contracts year-over-year and consistent price improvement.
High rents in Manhattan are also continuing to help sales: any potential buyers who were waiting out the sales market in rentals are finally deciding to buy, hoping interest rates will start to come down at the end of 2024 or early 2025. Currently, the Fed is predicting an 84% chance of a rate cut in the upcoming September meeting.
Right now, inventory is starting to decline and liquidity, the contracts signed in the past 30 days, is also slowing down. Summer is here and this is typical for the season. Buyers are going to have the upper hand this summer, but the fall will be an interesting season considering the strength of the economy versus the upcoming elections.
