A Tough 2023 for NYC Real Estate

A Tough 2023 for NYC Real Estate

What a year it's been! In early January, I told my team that it would be a good but challenging year where we would have to work even harder and smarter to achieve and accomplish our client's goals. Boy, was I right, and it was even more challenging than I had predicted.

December offers the opportunity to reflect on the past 12 months and look forward to the new year. We know 2023 has been one of the toughest years for New York City real estate, defined by weak inventory, sharply higher interest rates, higher inflation, and continued recession fears, and as it draws to a close, we look forward to 2024.

But what will the new year have in store for us?

Here are four critical areas that are poised to influence the Manhattan Real Estate market in 2024.

  1. Interest and Mortgage Rates:
    • High rates are not stopping people from buying or selling. It is merely delaying the inevitable. There will always be a need to buy and sell, and sooner or later, rates will drop.
    • Lenders speculate that the FED may start to cut rates as early as the first or second quarter of next year, and such a scenario will potentially boost demand.
    • So if you're looking, stay ahead of the trend and pull the trigger before everybody else does.
  2. The General Economy:
    • A buoyant stock market often signals increased consumer confidence, which usually translates to more activity in the real estate sector.
    • Furthermore, inflation has come down notably, far off its 9+% high, which could also contribute to a rise in Manhattan sales in 2024. 
    • If the economy manages to avoid a much-predicted recession and consumers remain strong, we predict an increase in contract-signed activity, especially in the luxury sector.
  3. The 2024 Presidential Elections:
    • Historical data reveals a noticeable trend in the Manhattan real estate market around election periods. There's a tendency for both supply and demand to dip.
    • Buyers and sellers tend to adopt a cautious approach to the market, leading to reduced activity, which then picks back up post-election.
  4. Geopolitical Uncertainties:
    • Lastly, the geopolitical landscape can cast ripples across global markets, including real estate. While direct correlation can be nuanced, geopolitical instability pushes investors to seek safety, and real estate is arguably the safest asset
    • We could see increased demand for Manhattan condos from foreign investors searching for safer US assets. 
    • From interest rates and economic indicators to global events, the market's trajectory is shaped by various elements.

While challenges persist, the resilience and dynamism of Manhattan's real estate remains one of its defining features.

Happy Holidays!

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