In the city that never sleeps, selling a home is proving to be really quite stressful, according to a recent StreetEasy survey conducted by The Harris Poll.
New York City’s notoriously competitive real estate market is causing a wave of anxiety for sellers, with a staggering 35.7% of previously owned homes listed on StreetEasy in 2022 being removed from the market without finding a buyer.
The StreetEasy analysis highlights the challenges sellers face in the city. Even when a home does find a buyer, it takes significantly longer to sell in New York than in the rest of the country.
With the median listing spending 89 days on the market compared to the national average of just 15 days, it’s clear that the city’s real estate market is not for the faint of heart — and for those who know that patience, in certain cases, is a virtue.
Why are NYC homes failing to sell?
Several factors are contributing to this challenging landscape for sellers:
Pricing wars: Setting an asking price even slightly higher than comparable homes in the neighborhood can increase the probability of not selling by a whopping 9%.Days on market: For each additional month a property sits on the market, the likelihood of not selling increases by 3%.Agent assistance: Homes listed as “For Sale By Owner” were 38% less likely to sell than those represented by a real estate agent.
The New York City reality
New York City’s real estate market is unique in many ways. It’s a sales market defined by co-ops, condos and townhouses, all of which come with vastly different price points.
In 2022, 31.7% of co-op listings didn’t find a buyer, compared to 41.6% for condos citywide, and a staggering 50.1% for townhouses in Manhattan and “brownstone Brooklyn” neighborhoods. Higher price points often translate to smaller pools of potential buyers.
In 2023, the median asking price of a city home reached $1.09 million, nearly triple the national median, according to data from Zillow, which owns StreetEasy.
Despite these hurdles, most successful sellers in New York City are still able to negotiate offers close to their initial asking prices.
The typical home sold in September received 96.4% of its initial asking price, suggesting that sellers can largely maintain their asking prices, especially in certain boroughs.
However, as of September 2023, the average 30-year fixed mortgage rate inched closer to 8%, reaching 7.53% in the last week of September. This steep rise in rates to combat languishing inflation is causing many would-be buyers to hesitate, raising concerns about affordability.
An increase in rates to 8% would push an average buyer’s potential mortgage payment up by $285 to $6,428 when buying a median-priced NYC home with a 20% down payment.
With fewer potential buyers in the market, more sellers are pulling their listings after struggling to secure a buyer.
In contrast, lower interest rates in 2021 resulted in the lowest rate of homes going unsold in recent years, at 30.4%.
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