As the leaves change and apple-picking season arrives, we reflect on the New York City real estate market as September draws to a close. For months, experts anticipated a significant recovery in the market, expecting interest rates to decline and job stability to rise. More people have been returning to offices, creating optimism for potential homebuyers.
#### Sales Volume Declines
Surprisingly, September saw fewer homes go under contract compared to August—historically one of the slowest months for real estate. In fact, this September's sales volume reached only **58% of the 10-year average**. What factors contribute to this decline?
#### Influence of Election Cycle
Is the upcoming election affecting buyer confidence? This presidential cycle, noted as one of the most polarizing in decades, may have many buyers hesitating, fearing that political outcomes could impact property values.
#### Rising Mortgage Rates
Contrary to expectations, mortgage rates increased in September. Following a drop in July and August due to Fed expectations, rates have now reverted upward. However, indications that the Fed may reduce rates another quarter point in November suggest a potential turnaround, making home financing more attractive soon.
#### Inventory Insights
The Manhattan market currently boasts around **6,700 homes**, but feels more constrained due to many listings lingering for over a year. It’s estimated that over **50% of these homes have been on the market longer than reported**—some removed and relisted to alter their perceived market duration.
#### Price Drops and Market Rejection
In September, only **446 price reductions** were noted, representing just **6%** of total listings—the lowest percentage of reductions observed in 18 months. This suggests that the market is rejecting many properties for various reasons. While there is an expectation of further price drops, the future remains uncertain.
#### Looking Ahead
Despite various challenges—be it the election, fluctuating mortgage rates, or low inventory—the outlook remains optimistic. Interest rates are expected to stabilize, allowing buyers to lock in rates in the low fives before year-end potentially. Currently, buyers are securing rates around **5.5%**, indicating a path to recovery.
#### Conclusion
Ultimately, the market will adapt. Stale and overpriced properties will either sell or face significant changes. As we head into the final months of the year, potential buyers and sellers should keep a close eye on evolving trends within the New York City real estate landscape.
