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Dear Clients and Friends,
April 2024 performed relatively similarly to the prior month. While new listing supply increased month-over-month, a simultaneous ~4% decline in the number of signed contracts yielded a slight drop in the market pulse. This Spring’s trajectory is (so far) mirroring the 2023 trend in which the market was up in March, down slightly in April, and notched back up a bit again in May. It remains to be seen if there will be a tightening of new inventory in May, as it’s likely that monthly new listing supply will peak soon (if it hasn’t done so already).
Although monthly signed contract activity did not trend upward, we are finding that many buyers and sellers are not so far apart in their view of the market, and we have been able to close deals through strategic negotiation and effective demonstration of properties’ individual value proposition. (Interestingly, ~35% of the homes entering contract over the last 90 days had an asking price reduction from their original list price, which -- historically speaking -- is relatively modest.) Of course, uncertainty over how soon interest rates will begin to drop and the fact that we are in an election year continue to be variable drivers of buyer/seller sentiment.
Closings in the luxury market have maintained momentum, with new development comprising a substantial portion of contract signings. The 2Q24 REBNY new building construction report estimated that the current number of new building filings is 37% below the quarterly average since 2008. A marginal pipeline of new residential projects (in part due to the cost of construction and scarcity of available land parcels) suggests that there will be limited new condo product coming online in 3-4 years, which should put upward pressure on pricing.
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