As July turns into August, the real estate market in New York has entered its own special rhythm. In these endless, rainless, scorching summer days, serious buyers in a certain price range have made their way through the still limited inventory of desirable condos and are making their decisions. This does not apply to the super rich. Mostly in the summer they do not inhabit the city and most of them already have a place to live. Therefore, after a hot market in 2021, the most expensive areas are completely inactive. Desirable large properties in high-rise buildings priced from $10 million and up don’t seem to generate calls or emails asking for a showing from one week to the next. Interestingly, this is true for both condominiums and cooperatives. Sponsors are in much more extensive negotiations than this time last year, and even then, signed contracts decreased by 30% or more.

While there is a lot of talk about the possibility of a recession tough job market and the rate at which unemployment continues to fall makes a true recession unlikely. However, some of the issues facing consumers are very real: It can cost $75 to fill up your car with gas prices in supermarkets continue to rise as supply chain issues plague import-export businesses worldwide. The Stock exchange still unable to gain enough traction to post sustained gains. with Russia continues the war with Ukraineand The Chinese are conducting military exercises to show their displeasure with Nancy Pelosi’s visit to Taiwan, not to mention the growing polarization caused by Hearings on January 6the world outside and inside has rarely felt more fragile.

This sense of fragility affects the approach of buyers and sellers to the real estate market. While many sellers are hoping that the fall season or some significant break in stock market or interest rate news will bring their property prices back to where they were eight to ten months ago, more and more sellers are recognizing that reality to sell, they have to price the market as it looks TODAY. Most of the deals that closed this summer reflect prices that have been reduced, and most of those deals show a sales price below $4 million. In fact, the $2 million and under markets remain the busiest markets in Manhattan and Brooklyn.

Regardless of the price, buyers are acting with more caution than at any time since pandemic lockdowns began to ease. While the slowdown in absorption means properties are staying on the market longer, many areas of the city are still underserved by inventory. And while there are a number of condos in Park, Fifth Quarter and Central Park West that have been on the market for months, the best one-, two-, and three-bedrooms under $4 million are selling, often within weeks of being listed. Competitive bidding has largely disappeared, as have over-asking sales. Most buyers today prefer to wait for the next one, rather than what they perceive as “overpaying.”

Many sellers hope the market will pick up in the fall. The fundamentals of this market slowdown are not seasonal; this is not a summer lull. They are a response to deeper problems at the regional, national and global levels. As the midterm elections approach, the pressure may be greater, not less; causing buyers to hold back. Therefore, the current environment is likely to persist until the end of 2022.

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