Now that we're fully embracing the New Year – how is it almost March?! – let's discuss where the real estate market is headed!
December 2021 concluded a full year of strong buyer demand and record shattering sales volumes. The beginning of 2022 faired similarly with the busiest January luxury market (homes priced $4 million and higher) since we began tracking 2006.
Despite rising inflation, increasing interest rates, an unstable stock market, and imminent foreign unrest, Manhattan and Hamptons markets surged, proving that buyer demand is here to stay.
- Buyer Demand - Luxury signed contracts surpassed 100 in January 2022 - over 20 more than this time last year. While the beginning of 2021 demonstrated slow buyer influx and an overall gentle economic pick-up, 2022 began full throttle and proved buyers are ready to move up in price and size.
- Negotiability – The discount from last asking price plummeted for Condos as developers of new luxury condominiums reduced concessions and dropped in half for Coops as sellers found less competition from their neighbors.
- Pricing – Sellers who are pricing it right are seeing increased bidding wars and much more at-ask offers due to consistent buyer demand.
- Inventory – Home availability reduced slightly from last month as new sellers entered the market after the holidays and dropped significantly from January last year. With a busy Spring quarter ahead, we expect more sellers to list their homes to take advantage of beneficial market conditions. We also expect buyer demand to outpace these newly available homes.
- Interest Rates – rates remained low for the entirety of 2021 and are now steadily increasing. This upward trend will eventually put pressure on prices, but for the moment, it is encouraging buyers to sign on the dotted line in order to lock in low rates before it is too late.
For both buyers and sellers, the market is being honest with its trajectory. It will be a busy Spring, so a buyer should act soon if they are looking for their next home. For sellers, a smart listing price and a Spring launch will ultimately result in them receiving the best possible value for their home.