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New York

Home contracts rise in Manhattan, Brooklyn, ending 17-month swoon

Market could be stabilizing after year of high rates: Miller Samuel

Contracts Up in Manhattan, Brooklyn: Report
(Getty)

First, the good news: Contract signings for home purchases increased annually in Manhattan and Brooklyn in October for the first time in a year and a half.

Now, the asterisk: The increase is largely because the market was in free-fall a year ago as mortgage rates shot up, not because it went gangbusters last month, according to a report by appraiser Miller Samuel for Douglas Elliman.

It could be a sign that the market is stabilizing, but that depends largely on what the Federal Reserve decides to do in the coming months, said the report’s author, Miller Samuel CEO Jonathan Miller. The Fed opted Wednesday not to raise rates.

“If that holds, we may see mortgage rates slip a bit, which may help volume,” Miller said. “But I don’t see a surge or a return to the levels we saw a couple of years ago because I don’t think rates are going to drop substantially over the next couple of years.”

The rate-hike pause is a trend that could last for the next few months, according to William Raveis Mortgage executive Melissa Cohn.

“The economy is starting to slow down and inflation will moderate at a pace that suits the Fed,” she said in a statement.

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Manhattan and Brooklyn’s new contract activity increased significantly year-over-year in October across the three property types tracked by Miller Samuel — co-ops, condos and one- to three-family buildings — for properties above $1 million.

“Pivoting from [a down market] to sideways, the first to lift their heads out of the water would be higher-end because they’re less impacted by the higher rates,” said Miller. Luxury home buyers are less likely to worry about interest costs or to borrow money at all for their purchases.

Lack of for-sale inventory has plagued the market for a while, and October brought mixed but mostly bad news on that front.

New listings in Manhattan fell by over 200 month-over-month for condos and co-ops, while listings for one- to three-family buildings rose significantly for the second straight month, to 45 from just over 15 in August.

New listings in Brooklyn fell from the previous month for all three property types, while new signed contracts rose slightly for condos and co-ops. Contract signings for one- to three-family buildings jumped from roughly 30 to more than 100.

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BrooklynDouglas EllimanLuxury Real EstateManhattan