25 or 50?

Market Pulse

Manhattan's luxury real estate market remains active, with 23 contracts signed last week for properties priced at $4 million and above, including 15 condos, 4 co-ops, and 4 townhouses. The average asking price for these properties was $8.4 million, with a median of $5.8 million. Properties are selling at an average 14% discount from their initial asking prices, highlighting the current buyer's market as reduced competition benefits purchasers.

While some buyers are holding off on entering the market as they await rate cuts, which are expected to further stimulate activity, others are capitalizing on current prices before increased competition drives up costs amid limited inventory. The market remains strong, with a growing number of contracts being signed, building on the momentum from an already active August. This trend is likely to accelerate once the Fed announces rate cuts, drawing even more buyers into the market and intensifying demand.

Top Sale

Leading the market this week was the Waterfall Mansion at 170 East 80th Street, which closed at $17,995,000. This remarkable five-story former carriage house spans 11,250 square feet and features a dramatic 23-foot indoor waterfall, creating a serene and distinctive ambiance. The property masterfully blends historic charm with modern luxury, offering expansive open living areas, high ceilings, and abundant natural light from numerous skylights.

Inside, the residence balances elegance and comfort with multiple living areas, a state-of-the-art kitchen, and sophisticated dining spaces perfect for entertaining. The spacious bedrooms include a luxurious primary suite with a spa-like bathroom. The home also boasts a beautifully landscaped rooftop terrace, providing a private escape with views of the Upper East Side. Despite undergoing several price adjustments, the final sale underscores its unique appeal as a standout in Manhattan’s luxury market.

The Anticipated Fed Rate Cut: What to Expect and Its Impact on NYC Housing

As we approach the Federal Reserve's announcement, market anticipation is high, with speculation focusing on whether the Fed will opt for a 25 or 50 basis point rate cut. I anticipate a 25 basis point cut, as the Fed navigates a delicate balance between promoting economic growth and controlling inflation. Recent Fed communications and economic data suggest a cautious easing approach, with Chair Jerome Powell emphasizing the need for restraint amidst ongoing inflationary pressures, particularly from housing costs. Housing remains a significant driver of inflation, contributing to the core CPI’s persistent 3.7% year-over-year increase. The Fed’s focus on housing underscores the challenge of cooling inflation without destabilizing the broader economy, making a modest 25 basis point cut the more strategic move to stabilize borrowing costs while avoiding a resurgence of inflationary risks.

Moreover, the Fed’s strategy of a measured 25 basis point cut is rooted in lessons from past economic cycles, where rapid or excessive rate reductions have reignited inflationary pressures. A gradual approach aims to ease borrowing costs without undermining the Fed's inflation-fighting credibility. The Fed has signaled openness to additional cuts if the initial adjustment stabilizes economic conditions effectively. This phased strategy allows the Fed to remain flexible, making further rate cuts possible should inflation moderate and economic conditions warrant. The nuanced approach reflects the Fed’s intent to stimulate growth while preventing potential pitfalls like asset bubbles or market instability.

Impact on Housing Market 

Expected Fed rate cuts will likely have a significant impact on mortgage rates, which have hovered over 6.5%  for much of the year. A reduction in the federal funds rate typically exerts downward pressure on the 10-year Treasury yields, closely tied to mortgage rates. If the Fed moves forward with a 25 basis point cut, I anticipate mortgage rates could decline into the high 5% range, landing between 5.75% and 5.95%. This shift would represent a notable decrease from current levels, enhancing affordability for buyers. Historically, even modest rate cuts have boosted refinancing and home-buying activity by making homeownership more accessible.

However, the impact of rate cuts on the New York City housing market is more complex; particularly given the existing limited supply. Lower rates are expected to attract buyers who were previously priced out, but they could also encourage some current homeowners to list as the gap between their existing mortgage rates and current rates narrows. NYC's vacancy rate is just 1.4%, and new construction has slowed due to elevated financing costs and regulatory challenges. This constrained inventory suggests that any increase in demand will intensify pressure on the available housing stock, likely pushing prices higher. While rate-sensitive sellers could add to inventory, the market will likely continue to face upward price pressure, given that median sales prices have risen by 24% since pre-pandemic levels.

For buyers, entering the market before a potential surge in activity offers a strategic advantage. Acting now can help secure properties at current prices before increased competition drives costs higher. Many buyers are already positioning themselves in anticipation of the rate cut, ready to take advantage of expected drops in mortgage rates. Although some sellers may list their properties as rates align more closely with their existing mortgages, this modest increase in inventory is unlikely to counterbalance the overall upward pressure on prices. As demand grows and more buyers enter the market post-rate cut, competition will likely intensify, pushing prices higher and narrowing the window of affordability. Acting sooner rather than later can help buyers secure properties before these dynamics fully unfold.

Pick Of The Week

For those of you who might not know, beyond the bustling world of real estate, I'm quite the sports fan! As we dive deeper into the football season, I thought, why not sprinkle a little fun into our newsletter? Every week, I'll share my "Pick of the Week" for sports betting. While my expertise is firmly in real estate, I think this will be an enjoyable twist for our readers. But remember, it's all in good fun and purely for entertainment.

This week, I’m backing the USC Trojans -5.5 in their BIG10 matchup against the Michigan Wolverines. This game carries significant implications: Was last year a fluke for Michigan? Is a Lincion Riley team actually good at defense?

USC looks well-positioned for a strong run in the College Football Playoffs, and they’re likely second only to Ohio State in the race for the BIG10 Championship. Quarterback Miller Moss has been outstanding, showing precision and poise, and the new-look Trojan defense appears solid—a rarity for a Riley-coached team. On the other hand, Michigan's offense has been struggling for consistency. Davis Warren hasn’t been outright terrible, but this 2024 Michigan team lacks the firepower of last year’s roster, appearing to be a shadow of its former self.

I see USC’s defense putting significant pressure on Michigan, creating problems for their offense, while Miller Moss steps up with a statement game that could propel him into Heisman conversations. This matchup is more than just a game; it’s a chance for USC to establish itself as a top contender in the BIG10, and I believe they’ll cover the spread against a wobbly Michigan squad.

Contact Me Today

Feel free to reach out to discuss more in-depth about your real estate goals, share your thoughts about my newsletter, or to share what you're experiencing in this market. I look forward to hearing from you!

Thomas Moran

Salesperson | Administrator

View All my listings here

Nest Seekers International

594 Broadway Suite 401 New York, New York 10012

Mobile: 203.558.2845

Email: [email protected]

Website: https://tmorannestseekers.com