Well-Priced Inventory Is Low: New York Real Estate In Q2 2023

During the second quarter of 2023, New York City’s real estate market has been as volatile as our stock market. While the market for ultra-luxury apartments, both condo and co-op, has remained slow, the smaller units, which were having a run in April and much of May, have now sunk into the doldrums as well. In the one and two-bedroom market, properties that might have commanded several bids in April have now sat unpurchased through the month of June. Given that economic realities have actually improved a bit since the start of the year, the slowdown in purchase activity can probably be attributed to differences in the perception of value between buyers and sellers.

Some parts of the market present challenges which make their lack of appeal to purchasers more understandable. Poor condition remains an enormous barrier to the sale of properties across the price, size, and location spectra. With construction help difficult to find, supply chain issues continuing to impact installations, and a general backlog of work as fewer contractors elect to work in the city, both the costs and the timelines for large renovations stretch well beyond a year. And in those co-ops which still have summer work rules, the timelines, and thus the costs, stretch out almost indefinitely. Anyone buying in a large co-op in a building with summer work rules is all but guaranteed a three-year project, during which time the buyer, in addition to paying for the renovation, must continue to pay for their current accommodations as well as carrying the maintenance each month on the property being renovated.