While mortgage rates continue to rise, stock markets continue to decline. This weakness in the economy has affected Manhattan apartment sales, which have dropped 18% between July 1st and September 30th. This is the first drop since the end of 2020, when sales fell by 21%. Many brokers hope the drop marks the end of artificial highs and a return to a normal housing market. They consider the lower listing prices to be simply a reflection of sellers responding to higher mortgage rates.
Other brokers, though, believe sales will decline further as the stock market continues to drop and mortgage rates continue to rise, with the higher end of the market showing the biggest weaknesses. Apartments priced over $10 million or more are spending longer on the market despite sellers increasing their discounts and coming down in price. In addition, sales of luxury apartments, which fall into the $4 million range, fell by 50% in September from the total the year before.
More Inventory and Falling Stock is Better for Investors
As the housing market in Manhattan starts to simmer down finally, many sellers are waiting to list their real estate until it improves. At the same time, wealthy investors are watching stocks fall below 20% and waiting for it to be reflected in the real estate market.
Despite higher mortgage rates, now is still an advantageous time to buy real estate in New York. Higher mortgage rates mean stricter lending standards. Stricter lending standards mean fewer people will qualify for a mortgage, which will affect selling prices. Additionally, wealthy investors will have less competition when choosing real estate – especially the more coveted, higher-priced apartments along Park and Fifth Avenue or Central Park West.
Hire a Real Estate Attorney in New York
If you are looking to purchase real estate in New York or are wondering how to sell with rising mortgage rates, Attorney Melvin Monachan can help. Mr. Monachan has spent years helping his clients navigate the complexities of acquiring and selling real estate. Call (347) 389-1682 to learn more, or contact us online today.