It’s half-time in 2022, and it’s a good break. Everyone I was waiting, and generally speaking, it was feel Like all players (buyers and sellers) entered their locker room for a break. The turmoil of 2022 has caused everyone to get tired of all the news (economics, politics, geopolitics, tragedy, etc.) and “time out” before returning. “Great pose” When people are reassessing their budget and looking at prices. The question is how long this moment will last. Certainly until the end of summer, and probably well in the fall.
We have been running about 1,300 trades a month since the post-pandemic run began, but peaked in April 2021 with about 1,800 trades that month alone. I’ve seen 1,500 as recently as in March of this year. But since then Transaction volume It has been below 1,000 in the last four weeks.This loss of momentum is the cause Negative emotionsBut keep in mind that it is relative. The market has been hot for nearly 18 months. This means that when you return to a more normal (pre-provided) level, you actually feel sick. health..
Monthly contract activity
Chart: Provided by: UrbanDigs
Significant reductions in this trading volume are defined Great pose, Brought to a variety of factors, especially this time by a sharp relative surge in inflation and interest rates.Both Impact on the system, Not only in the economic system, but also in our own personal / mental coping mechanism for rationality. Strangely Rental priceAstronomically expensive, it actually helps to liven up the sales market and maintain modest demand. And it is these high rents that investors actually re-enter the market. In fact, people want to buy. However, the trading volume decreased due to the bid / ask disconnection between the buyer and the seller.
While the buyer is adjusting the offer to compensate for the decline in purchasing power (see what’s stunning) Purchasing power (Analysis below), many sellers hold yesterday’s price. All current market reports show record results from recent peaks earlier this year.But those results are exactly that, the delayed results of transactions negotiated in January, February and March of this year, before the war and before the best. inflation We saw in 40 years and yes … before Interest level It has virtually doubled. These numbers do not represent where we are. As a result, sellers need to adapt to new realities to achieve that.
There is a 2% difference
Experienced in the last 90 days
The example below reflects the following purchasing power differences:
3% vs 5%
$ 1 Million Borrowed at 3% = $ 4,216 / Month
$ 1 million borrowed at 5% = $ 5,368 per month
That’s a difference of $ 1,152 per month or $ 13,824 per year.
or, We can see it like this:
At 3%, $ 4,216 / month will give you a $ 1,000,000 mortgage.
At 5%, you’ll only get a $ 785,500 mortgage for $ 4,216 per month.
So what comes first?Now, the decline in trading volume has begun to bring about an increase in inventories, but the seasonal summer slowdown and “pause” are a greater reaction and are shrinking. Overall-Inventory at this point.Serious buyers are actually encountering a little because many buyers are on the sidelines Less competition.. With the fall and the flood of new real estate on the market, their destiny could improve further. Many sellers have withheld their property until the end of the summer. Emotions remain tenacious for most people, and this fall could offer incredible buying opportunities as higher levels of inventories are likely to outpace demand. But by midwinter / spring, emotions improved and New normal High interest rates and new, more favorable pricing will take hold.New buyers will enter the market in large numbers, and it again has very busy and super-competitive first half qualities 2023..
We have a lot to discuss, but we don’t have time. Contact me to discuss everything from inflation and interest rate forecasts, inventory, pricing, timing, rental markets, readiness and more.
As you know, I always say two things. 1) Those interested in buying or selling need to roll up their sleeves to determine if it’s time to sell or if they have residential / investment property. And 2) Who represents you is important… Your best investment is often in the broker of your choice.Find someone with experience felt You can do it trust..
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