National Summary
What’s going on with the market? Seems to be the first question anyone asks these days.
Memories are short. Historically, it takes an average of 120 days to sell a house (including diligence and closing). In 2023, the national average was 83 days and in 2022, it was 71. Presently, homes are sitting around 110 days.
New inventory is being added across the board (+29% nationally y/y); giving Buyers more options. Most Sellers have come back to reality regarding current values, but are hesitant to drop list prices to equate, as the few making offers want a significant discount.
In August 2024, only four states had returned to pre-pandemic inventory levels. In September 2024, however, it grew to seven states and in October 2024, that number grew again to eight states.
Mortgage rates are back above 7%, despite the 50 basis point Fed Funds Rate cut in September. This is due to the lack of demand for loans, as shown by slowing transactions.
The average age of homebuyers is the US has also risen by 6 years since July 2023; another sign that younger Americans are being priced out of the market. The average age of home owners is now 56, up from 49 in 2023 and 42 in 2010. The share of first-time Buyers also dropped from 32% to 24%, nationally.
Presidential Election
Now that the Presidential election is over, and thus some uncertainty mitigated, we expect to see momentum return to the general market. The Dow had a historic day immediately after the election, and the Fed dropped rates another 25 bps this week, thus setting the stage for Buyers to feel a sense of comfort in their decision-making.
Golden Triangle Markets
SYKES covers the Golden Triangle Markets of Palm Beach, Miami, NYC, The Hamptons, and coastal New Jersey.
Palm Beach
The single-family home market in greater Palm Beach has shown more resilience than that of condos. One reason being that Florida’s condo market is still working through state-mandated milestone study regulation passed following the Surfside condo collapse in 2021. Most buildings constructed before the year 2000 had significant structural updates needed, resulting in a series of special assessments that priced out many long-time residents. This is compounded by a slowdown in work-from-home migration to Florida and significant home insurance shocks.
Miami
There are over 40 new condo developments currently being sold pre-construction in Miami. Many of these will never come to fruition, so be careful where you make a deposit. In Florida, developers can use your escrow deposit for construction purposes after holding it for one year. This differs from other states where an escrow deposit is hands-off for any construction needs, and thus investing in pre-construction becomes more-risky in Florida (though often more lucrative as well).
NYC
Sales price trends in Manhattan are mixed as new lease signings continued to surge. Cash sales fell to their lowest point in two years, and luxury sales prices declined y/y as inventory increased annually for the third time due to the expansion of new development supply.
Median rental prices slid y/y for the fourth time in five months but new lease signings rose sharply as listing inventory increased, thus giving Renters much-needed optionality. Bidding wars occurred in nearly one-fifth of all rentals.
The Hamptons
Both sales and summer rentals were slower in 2024 than in previous years as many took the opportunity to vacation internationally. The number of transactions dropped 25% y/y to a total of 389 in Q3 (typically the market’s strongest quarter). In comparison, there were nearly 700 transactions in Q3 2021. Total volume also slid 17.6% y/y while the median price of single-family homes increased by 16% y/y. The market is just too expensive for Buyers to tolerate, thus facilitating a continued stand-off. General consensus is that developers are not building to market preferences; instead, they have maximized home size while disregarding the outdoor lifestyle that most desire.
Jersey Coast
Shore-town favorite Margate was just ranked as the third-hottest market in the country by the Philadelphia Business Journal. Prices in Margate and neighboring Longport have increased approximately 298% since 2019, and unlike the Hamptons or Miami, this pandemic hotspot shows no signs of slowing. Smart-money folk have realized the value in coastal New Jersey. Summer traffic from NYC moving south is far more tolerable than that eastbound on Long Island and despite the notable increase, there’s still a sense of value. Additionally, the nature of a north-south chain of barrier islands presents a vast opportunity for waterfront living.
