In the third quarter of 2023, New York City saw a significant decrease in multifamily sales, with only $1.55 billion recorded compared to the previous quarter’s $3.5 billion. According to Ariel Property Advisors’ Q3 Multifamily Quarter In Review for New York City, this represents a 56% decline in transaction volume and a 24% drop in total number of transactions.
The majority of sales were from free market and 421a buildings, which accounted for an impressive 81% of the total dollar volume. Rent stabilized buildings made up another significant portion at 16%, while affordable housing only captured about four percent – significantly lower than its share in Q2 when it accounted for over forty percent.
President and founder Shimon Shkury attributes this decline to higher interest rates and mortgage maturities that have disrupted the market during a time when larger financial institutions are pulling back their investments. However, there may be hope on the horizon as FDIC is currently marketing Signature Bank’s substantial multifamily loan portfolio – potentially leading to increased activity within this sector over upcoming months.
This latest report highlights how NYC’s multifamily market has been impacted by external factors but also offers potential opportunities for growth moving forward.
