With the temperature rising, the city empties on the weekends and the NYC real estate market is settling into its summer mode. Inventory comes down for the first time this year after having risen every month since January. Not surprisingly, the Absorption Rate increases from 6 months in the beginning of the year to 7.2 months this month (long term average is 8 months). The market is quite orderly by many other measures. The latest median sales price is 1.33mm, roughly the same as this time last year. After some increase in marketing time and buyer’s negotiation power these past few months, both measures turn to the sellers’ favor this month. At this week’s sales meeting, our office manager brought up something rather unexpected: Douglas Elliman’s 2nd quarter deal volume is not lower, but on par with what it was a year ago. Although some of that is helped by a few new development projects.
One interesting question is whether the market is going to see more demand from the Millennials as they start to form families. US Homeownership is at its lowest level since 1965: 63%, down from nearly 70% in 2004. If homeownership still holds the same appeal to the young generations, the market has more catching-up to do.