After reaching a 32-year high in the fourth quarter of 2021, New York City condos and co-op sales took a drastic drop beginning in late spring, shortly after the Federal Reserve began raising interest rates.
The Fed hopes the increases will ease rising inflation and avert a recession. In the short term, the moves have not only severely impacted home sales here and across the country but led to a drastic decline in the number of new properties put on the market.
Sales and listing comparisons for the metro area
Analysts say condo and co-op sales and new listings have been slumping since March. A year-to-year comparison from July 2021 to July 2022 shows similar results in two boroughs:
- Brooklyn: Condo sales dropped by 45.6%, and new listings fell 18.9%. Co-op sales declined by 25.7%, but new listings increased by 6.8%.
- Manhattan: Condo sales fell by 33.8%, and new listings decreased by 17%. Co-op contracts dropped 43.6%, and new listings decreased by 18.9%.
Manhattan also saw dramatic differences in condo sales depending on the price. The breakdown looks like this for properties priced:
- $2 million – $3.99 million: Declined 41.7%
- $4 million – $4.99 million: Declined 38.1%
- $5 million – $9.99 million: Declined 12.8%
- $10 million – $19.99 million: Declined 71.4%
Other major cities across the U.S. saw similar declines in sales but most experienced increases in new listings.
Both supply and demand trend downward
The decreases are linked to rising interest rates. Business website Crain’s says buyers are reluctant to bid on properties due to rising prices and financing costs. Most sellers, on the other hand, are generally not at a point where they are willing to entertain lower offers.
In an interview with the real estate website Mansion Global, Miller Samuel CEO Jonathan Miller said he believes no one is panicking at this point, which may account for the reduction in new listings. Miller says many condo and co-op sellers are riding out this wave of economic uncertainty, to see whether it’s a short-term setback in the New York real estate market.