Signed Contracts are Up but the Market Feels Slow. What Gives?

It's puzzling.  Signed contracts and pending sales continue to increase.  But, get a few brokers together and we'll all talk about the noticeable overall slowdown in open house attendance and showing requests.  What gives?  

First let's address the increase in signed contracts.  We know that there's still plenty of pent-up demand.  Here are a couple of additional reasons:

• More homes for buyers to buy. There are currently 6,527 homes on the market in Manhattan, up from about 4,800 in Jan.

• Price reductions. Back in Jan./Feb. the market was very busy, which encouraged some ambitious pricing. That's being corrected. We've seen a steady increase in price reductions to more palatable levels since then. Those lower prices are generating offers and signed contracts.

As for the reduction in showing requests and open house traffic, these two factors are having an impact: 

• Rising interest rates/lower investment portfolio value. Buyers who are financing and/or relying on their investments to fund the purchase may feel the need to pull back.

• The Ukraine/political uncertainty/Covid. These don't have a direct effect, but for people who are on the fence about a huge commitment like buying a home they provide reasons to opt out.

Let's be very clear. The market may be changing, but it's still quite strong and exceeds historic performance levels.  Some submarkets remain especially busy, like the $4-10M and the Brooklyn townhouse markets. 

Perhaps we're moving from a sellers' market to a more balanced, neutral one. Either way, transactions are happening and there is still plenty of opportunity for both sellers and buyers.