Booming Luxury

October 12, 2023

THE BIG SPLASH

Booming Luxury

What you should know

Manhattan's luxury market sees a surge in activity, logging its busiest week amid the ongoing housing slump, with 26 contracts signed for homes priced at $4 million or more.

Dig more

  • Rising home prices and high interest rates have generally dampened real estate sales.

  • Mortgage rates have escalated from 3% to over 7% in 2022, and a lack of inventory has exacerbated the issue.

  • U.S. incomes would need to increase by 55% to bring the market back to pre-pandemic levels of affordability.

  • Despite these challenges, Manhattan’s luxury market is showing signs of revival.

  • A total of 26 contracts, amounting to $228.7 million in sales, were signed in a week, marking the highest dollar value since mid-July.

  • The most expensive contract was for a duplex penthouse at 15 Hudson Yards, listed at $24.97 million.

A SCOOP OF MARKET DATA

The number you should know

60%

The housing inventory has shrunk by 60% between 2018 and 2023, exacerbating the affordability crisis.

Dig more

  • Goldman Sachs' analysis reveals a grim reality: housing affordability in 2023 is worse than it was during the 2008 financial crisis, with mortgage rates and home prices soaring.

  • Mortgage rates are nearing 7.5%, a peak not seen in over two decades.

  • The U.S. average home sale price for Q2 2023 is nearly $500,000, almost double since the 2008 crash.

  • Housing affordability has plummeted, with the Atlanta Fed reporting an 8% year-over-year drop as of July 2023.

  • The housing inventory has shrunk by 60% between 2018 and 2023, exacerbating the affordability crisis.

  • Despite the affordability challenges, home prices are expected to rise by 1.8% by the end of 2023 and 3.5% by the end of 2024.

  • Current high prices are attributed to low inventory, contrasting with the over-supply issue during the 2008 crisis.

A SCOOP OF INSIGHTS

Something you’ll learn

The I-35 corridor between Austin and San Antonio is experiencing a boom in apartment construction, with over 55,000 units underway, despite concerns of low occupancy and falling rental rates.

Dig more

  • Over 55,000 apartment units are under construction in the San Antonio and Austin metros.

  • Apartment occupancy in San Antonio averages 88.3%, below the benchmark for a healthy market.

  • Rental rates have declined, with a 0.6% decrease in San Antonio and a 3.1% drop in Austin over the past year.

  • The construction boom continues despite the occupancy and rate challenges, indicating investor confidence.

  • A shadow market of for-rent single-family housing is emerging, drawing renters away from multifamily properties.

  • Investors see the combination of a robust construction pipeline and low occupancy as an opportunity to acquire properties at favorable rates.

A SCOOP OF CONTROVERSY

Everyone will talk about it

DJ Envy of ‘The Breakfast Club’ has publicly denied allegations of involvement in a real estate fraud scheme that allegedly scammed investors out of millions.

Dig more

  • DJ Envy was accused of participating in a fraud scheme led by alleged fraudster Cesar Pina.

  • He addressed the allegations on air, emphasizing his intentions to uplift the community through real estate education.

  • Envy reiterated his victimhood in Pina’s illicit dealings, having lost a lot of money himself.

  • A lawsuit named Envy, accusing Cesar and Jennifer Pina of defrauding investors of $1.5 million in a New Jersey real estate project.

  • Envy maintains his innocence, claiming no direct involvement with the Pinas or their business.

How was today's shake?

Send us your feedback, ideas, love at [email protected]