In preparation for a cooling market, Douglas Elliman has warned New York City agents to advise sellers to consider price adjustments.
In an email to staff obtained by The Real Deal, Alfred Renna, a sales director at the company, cited interest rate hikes and the softening economy to come.
“If possible, it’s best to get ahead of this direction and not ‘chase the market down,’” Renna wrote. “Your sellers may want to consider price adjustments sooner rather than take a wait and see approach.”
Signed contracts data included in the email show a slight dip across indicators for Manhattan and Brooklyn. In the first two weeks of June, Manhattan signed contracts were down 34 percent year over year. Sales volume was down 21 percent, while medium sales price was up nearly 14 percent and discount was 3 percent.
Manhattan sales have been more impacted than those in Brooklyn, Renna said in the email.
Brooklyn’s signed contracts were the same from early last June, while sales volume was down 12 percent. Median sales price was up 3 percent and discount ticked down 3 percent.
“Douglas Elliman is a data-driven company,” a spokesperson for Elliman said in a statement. “We use this and other data from Jonathan Miller to inform marketing and sales strategies and pricing recommendations.”
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“We are confident that as current interest rate activity helps drive more buyers into the market, we will see less aspirational pricing and believe DE is well positioned for it,” the spokesperson added.
The brokerage world has already started to feel the effects of rising interest rates, along with inflation and a cooling market.
Earlier this week, Compass and Redfin laid off 450 and 470 employees respectively, citing economic uncertainty.
“As leaders in the real estate industry, you are on the front lines seeing the current economic trends take shape before they hit the rest of the economy, so it’s no surprise to you that the economic environment has consistently worsened over these last few months,” Compass CEO Robert Reffkin wrote in an email to staff.
The average 30-year fixed mortgage rate this week flirted with 6 percent, twice what it was just a few months ago.