February 2023 Manhattan Property Market Update – Weimin Tan
Posted by Wei Min Tan on February 7, 2023
February 2023 Manhattan Property Market Update
The Manhattan property market has been really slow since July 2022 because of heightened interest rates related to high inflation. In attempts to bring inflation down, the Federal Reserve increased interest rates aggressively and mortgage rates doubled. This led to the slowest sale market in my memory.
Good news is the rate hikes seem to be working. Inflation reached a peak of 9.1 percent in June 2022 and declined to 6.5 percent in December 2022, reflecting six consecutive months of decrease.
Mortgage Rates Down
Along with decreasing inflation, mortgage rates decreased as well. The 30-year fixed mortgage is now at 6 percent, from a high of 7 percent back in October 2022. This is good news to buyers who have been waiting for financing relief. As financing costs have decreased, buyer interest has increased. In some areas, bidding wars have even returned.
Read Wei Min’s article: Property investment in New York
Read about Wei Min’s style in Best Manhattan property agents and Role of a buyer’s broker.
Economy Doing Well
Meanwhile, the economy seems to be doing quite well. The U.S. unemployment rate fell to 3.4 percent in January 2023, the lowest since 1969 and lower than market predictions of 3.6 percent. New jobs in January 2023 surged to 517,000, the highest since July 2022. In addition, after a poor performance in 2022 where the S&P 500 lost about 20 percent of value, it recovered partially by increasing 9 percent year-to-date 2023.
Read Wei Min’s article: Manhattan Condo Historical Price Trend
Actual Market Activity?
Last week, we were bidding on a condo in Manhattan that sold within two weeks of listing! This has not happened since early 2022 when mortgage rates were still at historical lows. And within the U.S., new home sales in December was up 3 percent compared to the prior month.
Mortgage applications are up 25 percent compared to end of 2022 while signed contracts increased in December after six months of declines.
These may be signs of a pickup in the property market.
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale