Contract signings for homes plunge, yet inventory stays low

Across the New York region, contracts to buy homes have tapered off, but persistently depleted inventory has yet to rise.

Take Long Island, where new signed contracts for single-family homes were down 28 percent in June from a year ago, according to a report by Miller Samuel for Douglas Elliman. New listings were down 22 percent.

In the Hamptons, buyers signed 41 percent fewer contracts than in July 2021, while listings fell 15 percent. And in the North Fork, contracts dropped 40 percent and listings diminished 35 percent. (The report separates those two markets from the rest of Long Island.)

“You would expect with a slowdown in sales that inventory would climb substantially,” said Jonathan Miller, the author of the report. “Sellers are also looking at the market with caution.”

The one market not experiencing a lack of inventory, Miller said, is Manhattan, even though new listings were down 17 percent for condos, to 562, and down 19 percent for co-ops, to 593, from a year ago. Unsold listings from previous months mean there is still ample supply on the market.

New signed contracts in the borough plummeted 44 percent for co-ops and 34 percent for condos last month.

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Signed contracts do not always turn into sales, but their numbers reflect a more current snapshot of the market than closed sales, which stem from deals reached months earlier.

Rising mortgage rates this year have caused some homebuyers to retreat from the market. However, rates have recently retreated toward 5 percent, causing some buyers to venture back in.

“It’s nowhere near that heavy volume that we saw before all the Fed moves,” said Miller, referring to the Federal Reserve pushing interest rates up. “But it’s also not crickets.”

In Brooklyn, signed contracts once again fell. For co-ops, new signed contracts dropped 26 percent while for condos they dropped 46 percent. A year ago, mortgage rates were flirting with historic lows and buyers were in a veritable frenzy. A lot has changed since.

Outside the city, in Westchester, new signed contracts for single-family homes fell 26 percent while new listings dropped 20 percent. Similarly, in Fairfield County, contracts for single-family homes decreased by 24 percent and new listings by 24 percent. In Greenwich, new signed contracts plummeted 61 percent and new listings by 28 percent.