3Q22 Manhattan Market Report | Opportunities from Disquiet

Uncertainty is the enemy of all markets, and we are certainly in uncertain times.

The stock market is down ~20%. The Fed’s finish line, November Midterm election results, and the Russia-Ukraine conflict’s impact on global energy are all unclear. If one subscribes to Warren Buffet’s adage of being greedy when others are fearful, it’s an opportune time to buy.

Manhattan residential real estate activity continues to decelerate due to rising interest rates and geopolitical and economic disquiet. However, relative to our suburban counterparts that experienced more intense COVID pricing spikes and are now coming back to earth, Manhattan activity can now be described as “normal”. 

• Conforming mortgage rates are more than 25% higher than jumbos: money on bank balance sheets is driving more aggressive portfolio loan pricing

• Approximately 50% of Manhattan purchases are all-cash, limiting the impact of increasing rates

• Total sales number and dollar volume, and average size were all down, yet average and medium pricing increased. There is higher demand for renovated apartments

Buyers now have leverage with serious sellers as they’re not in a crowded competitive field; they also may have more for a down payment than they will if the stock market continues to fall. Sellers conversely have an opportunity for redeploying sales proceeds into a larger property at a lower price if trading up, or into the stock market under the driving principle of “buying low”.