COULD INTEREST RATE CUTS IGNITE A BUY SIGNAL THIS FALL?
A prerequisite for a successful career in sales is maintaining an optimistic outlook, which is crucial, especially during challenging or down markets. This fall, however, the Federal Reserve just enhanced those positive prospects with its first interest rate cut since Covid.
Currently, the average 30-year mortgage rate is below 6.5% for the first time in three years, after an initial rate cut of 50 basis points. The next cut, planned for 4Q 2024 could land us in the "High Fives". Given that the declining interest rates from 2002 to 2021 played a significant role in the 250% increase in property values in New York during that period, both buyers and sellers have reason to feel optimistic about the fall and beyond
HOW WILL THE NAR SETTLEMENT EFFECT NYC SELLERS AND BUYERS?
As of the time of this publication the Real Estate Board of New York has yet to agree to be a part of the NAR settlement which went into effect August 17th throughout much of the country. While this means practically that business will continue as usual for now, we expect that at some point New York will go along with the rest of the country in adopting the changes agreed to by the NAR.
The average 30year mortgage rate is below 6.5% for the first time in three years
KEY CHANGES:
1. No More Publication of Compensation: Agent compensation will no longer be listed openly in the Multiple Listing Service (MLS).
2. Buyer’s Compensation Responsibility: Buyers will now be required to sign an agreement stating that should the seller not elect to pay a buyers’ broker, the buyer will be responsible to pay their broker.
While the press has had a field day speculating on the repercussions of these changes, the reality is that the real estate market has been operating efficiently for many decades based on the premise that sellers pay for broker compensation, and buyers come up with the funds to purchase. In 20 years I have never heard a buyer complaining that did not have to their agent too.
It is our position that with a few exceptions, most buyers will never have to dip into their pockets to compensate their brokers in addition to their purchase prices and other closing costs.
The simplest reason is that most sellers who want to sell will continue to offer the buyers broker compensation as incentive to sell their properties. We are advising our seller clients to continue to offer compensation to the buyers broker.
When representing a buyer, agents will now communicate prior to showing properties whether the sellers are offering to pay buyers side compensation or not. In cases where there is no buy side compensation and the client wants a property, offers will be made stipulating that the sellers cover the buyers side compensation from the proceeds. The issue will be settled at the negotiating table, as it always has.
The total cost to buyers will always be front and center in their deliberations to purchase or not and have a direct effect on sales prices.
FOREIGN PURCHASES DROP TO RECORD LOWS
The war in Ukraine has killed off most Russian purchases in New York. The weakness in the Chinese economy coupled with government regulations has stifled ed the Chinese buyers as well. In fact, contrary to widely held opinions that its foreign buyers who are propping up the luxury market, foreign purchasers have accounted for only 2.25% of all purchasers in 2024. Who is buying in New York? Well, its alot of folks from Florida, New Jersey and California.
$4,750,000
Broadway
bedroom Condo | Lincoln Sq
Triple mint renovation with custom chevron oak floors, Viking kitchen, central AC, new windows, custom closets and designer finishes. A must see for discerning west 60’s luxury buyers.
Listing #18A
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