In the luxury residential market, September is a month that Brooklyn, NY Real Estate prefers not to remember.
For homes asking $2M or more, signed contracts last week were just 5 above the lowest week in 2022.
A few homes that did go to contract were a townhouse at 26 Varandah Place in Cobble Hill, asking $5.75M and at 30 Front Street in Dumbo, unit 21D in the Olympia Dumbo, asking n$4.4M.
In a monthly report for Douglas Elliman by the firm Miller Samuel, New signed contracts last month were down 20% to 30% across the board. According to Jonathan Miller, CEO of Miller Samuel “The way I think of the market is that activity is above normal levels, but it's down sharply from the frenzy of 2021”.
Mortgage rates have doubled, the stock market has nose dived and there is a lot of uncertainty in the market caused by the Federal Reserve. The results, contracts, listings and sales are down.
Miller also points out “Higher interest rates depress signings at the lower end of the market because mortgages become more expensive and their effect on the stock market depresses activity in the luxury sector”.
Listings are down and the inventory of homes for sale is low and buyers are competing for a small number of available homes.
Mortgage rates are at a 15 year high! The unrelenting rise in rates comes as the Federal Reserve keeps raising benchmark interest rates in an effort to tamp down inflation. Mortgage rates were at record lows at the start of the pandemic, which set the stage for a buying frenzy in the housing market. The good times did not last. Now, mortgage rates are crushing mortgage brokerage firms, forcing layoffs and firms are closing.
To be continued...
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