The Real Estate Market Is Finally Cooling Off, City Brokers Are Saying

The breakneck pace of the real estate market is slowing, top brokers at the city’s largest residential real estate firms said. In its initial stages, evidence of the change is anecdotal, and agents expressed disparate views on why the inventory of luxury properties is no longer drawing a frenzy of buyers.“There is an overall slowdown in the market,” a top seller at the Corcoran Group, Carrie Chiang, said. “People aren’t rushing into buying something like they did a year ago.”“The market is slowing, and pretty significantly, too,” a broker who specializes in luxury apartments at Douglas Elliman, Leonard Steinberg, said. “There is a scaling back of the very high-end properties, and, with more inventory, buyers are saying to themselves, ‘Hey, you know what, we should look closer to see if the quality justifies the price.'”A contributing factor to the slowdown, brokers said, may be the number of new developments that have come on the market. And many of these new developments are drawing investors who flip the property for a profit months after the building opens.A number of resales and apartments for rent can already be found at 505 Greenwich St., which opened to buyers earlier this year, and at One Morton Square, another new luxury development.“That is what happened in the last downturn of the market, in the 1980s, where investors began flipping the apartments, which is a great concern,” the chief economist at Brown Harris Stevens, Gregory Heym, said. Mr. Heym said he has not, however, seen any recent increase in inventory, and he said that the return of listings for new developments to the market does not necessarily indicate that speculative investors are the cause.“If you think about it,” he said, “people bought these apartments two to three years ago, even if they are just moved in now, and it is possible that the buyers’ lives changed and they no longer want or need the apartment.“It is too early to know if that is what is happening here, but my brokers tell me the market is still very tight,” Mr. Heym said.While economists who look for data haven’t seen any shift in the market, brokers on the ground agree there is a halt to the fevered pitch of several months ago. The president of Halstead, Diane Ramirez, attributed it to seasonal factors.“I don’t think we have an influx of new buyers at the moment because people are getting ready for the school year to end and are planning their summers,” she said. The market will bounce back at the end of summer, she said.Some brokers are still very busy, but it is mostly with listings that have not sold or buyers who have yet to make a purchase, Ms. Ramirez said. Still others said that while inventory does seem to be increasing, it has not caused a drop in pricing.The owner of the Upper East Side brokerage firm Gumley Haft Kleier, Michelle Kleier, said she is representing a buyer in a bidding war for a Park Avenue apartment with a $9 million price tag. Her client’s bid was $400,000 more than the asking price.She also sold a $6 million apartment on Fifth Avenue that had a buyer within two hours of being on the market, Ms. Kleier said.“These could be exceptions,” she said, “but I think that while there is slightly more inventory, the prices haven’t dropped.”The head of Stribling Private Brokerage, Kirk Henckels, said the months of April and May are traditionally some of the busiest for the real estate market, and the slowdown is attributable to softness in the national economy.“A lot of people perceive that the real estate market follows Wall Street, but it is the economy and consumer confidence that are the key indicators,” Mr. Henckels said.Consumer confidence fell in April for the fourth consecutive month, driven by rising energy prices, inflation, and a slowdown in the economy, a report by the University of Michigan, published last week found. The study – which is regarded as the gold standard – found that consumer sentiment fell to 87.7 in April from 92.6 in March.“I don’t know if this is the beginning of a larger turndown in the real estate market, but I think that whatever happens in the economy will reflect what will happen in the real estate market,” Mr. Henckels said.Whatever the reason for the sea change in the high-end residential market in the city, the end result is that overpriced properties are no longer selling at such a fast pace.“Certain asking prices have become excessive, and the unexplainable escalations that we’ve experienced over the past six months must cool off sooner or later,” Mr. Steinberg wrote in his monthly newsletter. While overpriced apartments may sit on the market, “quality will always sell for a premium,” he said.Some listings that haven’t sold include an apartment at 50 Bond St., which is asking $2,000 a square foot though the building has no doorman. The listing has been on the market since January.A penthouse at 30 Crosby St. had an asking price of $14.95 million, or nearly $2,500 a square foot, when it went on the market in June 2004. After a few months’ hiatus, it is back on the market with a $13.5 million asking price. The broker, Susan Wires of Stribling, said the building is undergoing construction, which has made it hard for buyers to see the listing. The neighboring penthouse, owned by pop star Lenny Kravitz, has been on the market since 2002.Although the consensus is that the market is slowing, many experts aren’t ready to conclude that this is the beginning of a larger downturn. Mortgage rates remain low, and inventory, while increasing, is still relatively hard to come by.“There is no way to conclude a definite trend until we’ve experienced a few more months of this newly emerged pattern,” Mr. Steinberg said.

The Real Estate Market Is Finally Cooling Off, City Brokers Are Saying

More from the New York Sun

Let Some Oil Tankers Sail Through the Strait of Hormuz — World Oil Prices Will Retreat Big Time

‘What Is Chabad Exactly?’

On Taxes in New York, It’s Mamdani v. Hochul

More from the New York Sun

Let Some Oil Tankers Sail Through the Strait of Hormuz — World Oil Prices Will Retreat Big Time

‘What Is Chabad Exactly?’

On Taxes in New York, It’s Mamdani v. Hochul

‘Hoppers’ is the Best Pixar Film of the Decade

Florida Senate Advances Bill To Let State Leaders Designate Groups as Terrorists After Federal Judge Blocks Effort by DeSantis

One Week In, Will Trump and Netanyahu Have Time To Finish Reshaping the Mideast and the World?

State Department Says Charter Flights Are Evacuating Hundreds of Americans Stranded in Middle East

Mayor Mamdani’s Wife Liked Posts Cheering on Hamas’s October 7 Massacre: Report