Spring home market not as good as ’21 or as bad as ’22

Spring likely won’t bring with it the bloom of inventory that agents are hoping for, but it probably won’t be as bad as last year.

That’s what analyst Jonathan Miller, CEO of Miller Samuel, sees in store for Manhattan and Brooklyn after crunching the numbers on new signed contracts and new listings in those boroughs for April.

“Condos are seeing higher inventory — but inventory is not high,” he said, drawing a year-over-year comparison. “The takeaway really is that inventory is effectively moving sideways and contracts in aggregate are moving sideways.”

Though inventory hasn’t been constrained in Manhattan like it has been in other markets, there doesn’t appear to be a significant influx of listings coming that would supercharge sales. New listings across the three property types Miller tracks — condos, co-ops and one-to-three family buildings — are essentially flat year-over-year, his monthly report for Douglas Elliman shows.

Miller blames stubbornly high interest rates for the lack of listings, as owners with low-rate mortgages are reluctant to sell and re-enter the market. He also suspects that the small number of homes on the market are still priced too high.

“I think the way you see new inventory come in is by seeing mortgage rates drop,” said Miller.

Agents were optimistic in January that the Federal Reserve would cut rates by this summer, but that sentiment has waned.  The Fed didn’t cut rates at its meeting on Wednesday, and chairman Jerome Powell said they would stay put until there’s “greater confidence” that inflation is coming down, according to the Associated Press.

“In recent months, inflation has shown a lack of further progress toward our 2 percent objective,” Powell said, adding that achieving that goal will “take longer than expected.”

One bright spot in the market last month was the one- to three-family sector in Brooklyn, where new signed contracts rose 43 percent year-over-year while inventory fell 10 percent. That pushed the aggregate number of new contracts up 11 percent over all three property types, despite condo and co-op numbers being relatively flat.

“We’re just having this sort of sawtooth pattern where it’s a little bit up, a little bit down,” said Miller.

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