New York City's housing market slumped late last year as mortgage rates soared past 8%, and multiple other factors led to the precipitous decline.
Home sales in the city of New York rose to 31 transactions in each of June's first two weeks and 32 in the third week, according to the Olshan Market Report. However, sales fell to 29 in June's fourth week, 24 in the second week of July, and 19 in the last week of July, and 8 in mid-September.
Several factors caused New York City's slump, including peaking mortgage rates, the war in Ukraine, and the Hamas attack on Israel, per Fortune, citing a report released Wednesday from Coldwell Banker Warburg.
What Happened to New York City's Real Estate Market?
Last year, many residential properties being sold for between $5 million to $10 million took up to six months to find a buyer, as reported by real estate analytics company UrbanDigs. The report also noted that even less expensive properties, such as one- and two-bedroom homes, took months to sell. The cost of a median-priced home also increased by 7.6% to $839,000 as of November 2023.
That being said, homes in New York City historically take an average of 89 days to be sold compared to 15 days nationally, per the real estate search engine StreetEasy. The median asking price of a home in New York City is also nearly triple that of the national market.
In addition to slumping home sales, the city's rental market also saw a decline as rents got more expensive due to high demand and low supplies. Rent control also limits how much landlords can raise rent, leading more people to choose to rent instead of buy.
Outlook for New York City's Real Estate Market in 2024
Following New York City's slump in 2023, home sellers are believed to return to the market in 2024. Baby boomers are also expected to downsize, which can add up to 30 million housing units to the market.
Mortgage rates are also believed to drop to about 6.6% by the end of next year. This will lead home affordability to improve in some markets next year.
