NYC Housing Market Sees Surge in Bidding Wars Despite Higher Mortgage Rates
Over one in five homes in New York City are selling above asking price, with Brooklyn leading the trend.
Bidding wars are on the rise in New York City, with more than 21.8% of homes selling for more than their asking price in August, according to a report from StreetEasy. This trend defies expectations that higher mortgage rates would cool the housing market.
In July, the share of homes selling above asking reached 25%, the highest since 2022. The market's heat is particularly pronounced in Brooklyn, where nearly a third of homes sold above their asking price. In the Park Slope neighborhood of Brooklyn, this figure jumped to three in five sales closing over ask. Greenwich Village also saw a significant spike, with 40% of homes selling above their list price.
This surge in bidding wars is occurring despite average 30-year mortgage rates hovering around 6.7% in August. Contributing to the competitive environment is a dwindling supply of homes on the market. Citywide inventory has decreased by 5% year-over-year, with Manhattan experiencing an 11.2% drop.
A draft report from the city's Department of Housing Preservation and Development estimates that New York needs to build 700,000 new housing units over the next decade to meet demand. This scarcity is a key driver of the current market dynamics.
Frances Katzen, a broker at Douglas Elliman, noted that buyer behavior does not always align with rate-related headlines. She advises sellers that a constrained inventory market, even with higher mortgage rates, can be more advantageous than waiting for rates to fall and facing increased competition from other sellers.
Properties in Brooklyn are also selling faster than in other parts of the city, with a median of 69 days on the market in August, six days quicker than the previous year. The citywide median time on market is 77 days.
Sellers appear to be strategically pricing homes slightly below market value to encourage multiple offers and bidding wars. This tactic is reflected in the data, with the citywide median asking price decreasing by 2% to $980,000, while actual sale prices continue to exceed this figure.