New York City Real Estate Industry Anticipates a Robust Fall Sales Season

With summer winding down and inflation cooling, a drop in mortgage rates and a possible drop in interest rates have real estate brokers hopeful that fall will be a robust sales season in New York City.

New listings increased just over 3% in July compared to last year, says Kenny Lee, an economist at StreetEasy, who recently authored a report on the best time of year to buy in the city. This “is a strong sign that rate lock is losing its grip on the city’s sellers,” Lee tells Brick Underground. “I think it’s likely that more sellers will join the market as mortgage rates continue to decline, just as more buyers will join the market.”

Mortgage rates have come down to their lowest level in more than a year, and in September, with inflation cooling, the Federal Reserve Bank is expected to cut interest rates by a quarter-point. These developments, coupled with pent-up demand, have brokers feeling optimistic about the fall season.

“We are hearing that sellers who have been waiting are finally ready to list this fall in order to be a part of what is expected to be a rush, once it's clear that the Fed has cut the benchmark lending rate, 10-year Treasury yields are holding at or just below 4%, and the fluctuations in the stock market level off,” says Douglas Wagner, director of brokerage services at BOND New York.

The atmosphere is already changing, according to Sean Adu-Gyamfi, a broker at Coldwell Banker Warburg. “We’ve had a steady two weeks of decreasing [mortgage rates] and this does not include the expected rate cuts from the Fed come September. The rates dropping are the clearest indicator of an active market, and I’ve already had conversations from buyers who have said, ‘I’m waiting for rates to drop.'”

Even rents come into the calculus. Many potential buyers have been waiting out the high-interest climate by renting, but with city rents again near an all-time high, many of those renters are questioning the wisdom of resigning leases. Those sky-hight rents “will incentivize buyers to get back into the market,” says Christine Miller Martin, an agent at Compass.

Another possible spur for sales is the recent change to broker fees and listings services, the result of the $418 settlement of a lawsuit brought by homeowners against the National Association of Realtors and numerous brokerages. Broker fees are expected to come down as a result of the settlement, which went into effect Aug. 17.

It all points toward "a totally different market" this fall, says Debra Shultz, vice president of lending at CrossCountry Mortgage. “I’m already inundated with pre-approvals for buyers paying attention to the news. Rates have started to drop ahead of a Fed rate cut. They’re ready. It’s been two years of dilly-dallying. My team and I will likely be working well before and after hours to keep up with demand. I’ll be doing pre-approvals in my sleep.”