It's getting really spooky in the New York City housing market this quarter.
The real estate sector is still adjusting to rising mortgage rates, recession fears and a strong job market.
A new report from Coldwell Banker Warburg shows that the prevailing mood in New York City is disgruet. The company is looking at the New York City property market in the third quarter of the year.
The city has entered a tornado market, said Frederick Warburg Peters, president of Coldwell Banker Warburg, and author of the report.
A tornado is unpredictable and no one knows what path it will take. Peters explained to MarketWatch that it can raze one house to the ground while leaving the neighboring house intact.
He said that the term tornado market refers to a situation in which it is hard to determine why a property sells in three days with three offers, and a similar one a block away can remain on the market for three months without a bid.
Peters explained in the report that there was a quality of randomness to what sells and what doesn't, and that may be attributable to condition, as well as supply chain issues and the fact that many co-op boards make buyers wary of apartments that need renovations.
Don't be mistaken. Sales haven't gone well in the Big Apple: Smaller and mid-sized properties saw brisk sales in the third quarter, compared to larger units.
Through the summer, Brooklyn and Queens saw a strong increase in condo sales.
Peters said that the $10 million and above condo market was quieter, as well as pricey townhomes and large pre-war co-op apartments along Park and Fifth Avenues and Central Park West.
Co-op apartments or co-operative apartments are a big city phenomenon, where one shares ownership of a building with other occupants. When you purchase a co-op, you're not buying the property, but you're buying shares in a nonprofit corporation that allows you to live there.
The simpler ownership experience makes condos appeal more to buyers, unlike co-ops, according to Peters. From being able to have access to amenities like meeting rooms and professional level fitness centers, the newer luxury buildings offer a move-in ready home.
The older units were less attractive, as it required buyers to embark on extensive renovations. It is also compounded by supply-chain shortages, and the vagaries of co-op boards that must approve renovations, which scares away prospective buyers, according to Peters.
Peters said that the sales of units on the Upper West Side were slightly more brisk than the Upper East Side.
Everything in the Village sold if priced right, he said, including properties in the East Village where no one who had a choice would have considered living forty years ago. Even though the market has cooled, inventory is still tight in New York.