Looking to buy a home in Manhattan or Brooklyn? That might be difficult.
New signed contracts have tapered off dramatically and so have new listings, according to the latest report by Douglas Elliman compiled by Miller Samuel.
In Manhattan, deals are down 20 percent year-over-year for co-ops, 31 percent for condos and 32 percent for one- to three-family homes. New listings dropped 9 percent, 20 percent and 36 percent, respectively.
“At the same time we’re seeing sales activity decline, we’re also seeing inventory decline, which makes the market feel like it’s not as slow,” said Jonathan Miller, the author of the report.
In other words: fewer buyers and fewer homes to buy, which balances out.
Last year was defined by what Miller called “supercharged sales volume” — so the argument could be made that the August numbers show a normalizing market.
Signed contracts do not always turn into sales, but they reflect a more current snapshot of the market, as closed sales stem from deals reached months earlier.
In Brooklyn, new signed contracts dropped 30 percent for co-ops and 33 percent for condos. One- to three-family homes were an outlier, with new signed contracts increasing 6 percent.
New listings in the borough also fell. For co-ops, new listings declined by 7 percent, for condos 27 percent and for one- to three-family homes 9 percent.
Miller noted that higher mortgage costs are among the reasons inventory is low, as rate-averse homeowners refrain from shopping for a new home and thus do not list their current one.
The average rate for a 30-year mortgage two weeks ago hit 6 percent, double what it was a year ago. And it climbed another quarter-point last week.
“The conditions aren’t compelling enough for some people to come into the market just yet,” Miller said. “We’ll probably see this until we see stabilization in mortgage rates.”