Sell Signal For NYC?
Michael Holt | April 11, 2023
Holt's Monthly Market
Michael Holt | April 11, 2023
Holt's Monthly Market
The sell signal timing window indicates that sellers may be approaching the peak of market activity and influence. During this period, the possibility of a trend reversal increases with time. Our thesis is supported by several data points, including a surge in liquidity, the approaching peak seasonality, and a rebound in the Manhattan price index.
The level of liquidity in the market indicates a seller's ability to conduct transactions at their desired price and serves as an effective indicator of the market's strength. We closely examine this metric to analyze its trend over time, assess its current status, and project where it may go in the future. As demonstrated by the chart below, liquidity has experienced a significant increase in the last two months and appears to be approaching its peak as it approaches the upper end of its recent trend channel.
It is clear from this chart that we are approaching resistance levels and are likely in the peak liquidity phase of the spring season. We expect this to last over the next 4-6 weeks.
Manhattan's real estate market follows a seasonal pattern with two primary active seasons each year - spring and fall. The spring season is typically longer and more active than the fall season. As of now, we are in the midst of the spring season and approaching the final six weeks of historically high deal volume. This indicates that as we reach June, the market's liquidity and deal volume are expected to decline and remain low throughout the four consecutive summer months until the start of the fall season in October. The following chart depicts this seasonal dynamic:
The proprietary price action index from our partner Urban Digs shows us still down from last year's peak in April but rising off lows from late 2022 as liquidity returned to the marketplace. This measure does not yet take into account deals signed from February through today and is therefore likely to see future pipeline pressures to the upside.
The market has witnessed a consistent improvement over the past few months, and we are approaching the peak of this recovery. If your property has been on the market for more than 60 days with no signs of activity, it is advisable to revisit your pricing strategy as soon as possible before the season ends. For new sellers, targeting the first 30 days is crucial to secure a deal and take advantage of the current high liquidity levels before June arrives.
We released our buy calls in December and January, a time when buy-side leverage was at its peak. However, since then, the level of leverage has been declining. If you are currently in the market to buy, be prepared to encounter heightened competition for quality products at reasonable prices. For buyers seeking value plays with above-average discounts, the next favorable window is expected to be in late summer or early fall. Keep a close eye on the market trends for cues. Currently, leverage is mostly neutral, but with net listing trends remaining flat, sellers may have a slight upper hand.
Thanks for taking the time to read our blog. Every member of The Living New York is passionate about the real estate market and collaborates with top analysts to bring information you can trust. If you have any questions about this article, the market, or what makes us among the top real estate agents in NYC please don't hesitate to reach out. Our areas of expertise cover everywhere from Upper East Side real estate to Brooklyn Heights real estate for sale. We'd love to hear about your goals and what it is you're thinking of changing about where you live now. To find out your buying power click here. To learn more about why you should list with The Living New York click here.
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