Elegran Insights: Weekly Manhattan & Brooklyn Market
Week of 1/16/23
For weeks, we’ve been vocalizing our amazement that, after 18-months of being overbought, demand for NYC hasn’t dropped well into underbought territory. Instead, it’s been bouncing along the pre-pandemic* average.
However — drum roll, please — we finally have something new to report. This week, demand, as measured by the number of contracts signed, slid –17% below that pre-pandemic average, the lowest level since the week ending 12/27/2020. Why is this “news” when the three recent holiday weeks were lower by –32%, –19% and –28%, chronologically? Because this week was a non-holiday.
Do we think this data point is the canary in the coal mine? No, no we don’t. We believe it’s nothing more than a lingering holiday slowdown. And not really news after all then.
If we can’t produce news, we can at least generate an interesting observation.
Please see below the overlay of demand for new development product in Manhattan and Brooklyn since COVID. Here’s what we learn from the graphic, all in terms of Brooklyn compared to Manhattan:
- The COVID-induced demand trough was less severe
- Demand for the borough recovered faster
- The post-vaccine demand spikes were more extreme
- Stronger demand numbers post-mortgage rate-induced cooldown
* the period 5 Jan 2015 to 1 Mar 2020
Manhattan Supply was robust two years ago, 8193 units, because developers responded to the release of pent-up demand with a release of their own — shadow inventory. This week, total supply was significantly leaner, 5839 units, because record demand in 2021 and H1–2022 outpaced new offerings and absorbed a great deal of that supply. At 244 units, new inventory this week is lower than the previous two years.
Brooklyn Supply, 2797 units, is down –12% this week compared to last year, which is not surprising considering demand for the borough has been white hot. New supply, 165 units, is roughly the same as what it was at this time last year.
Manhattan Pending Sales are trending downward, lower by –2.5% this week, although not as quickly as during Q3–2022 when rising mortgage rates slammed the breaks on demand. Although demand levels have stabilized, the metric is still trending at –17% below its pre-pandemic average.
Brooklyn Pending Sales, like Manhattan, dropped precipitously in July but landed softly. However, over the past few months, what had been a slightly downward trend appears to be accelerating, lower by –4% to 1,566 this week.
Manhattan Contracts Signed — Since mid-2022 when, after flying high for 18-months, rising mortgage rates finally let the air out of the balloon, demand for Manhattan has been trending at an average of –17% below its pre-pandemic benchmark. This week, the number of contracts signed, 140, was down –31%.
Brooklyn Contracts Signed — At 87 contracts signed this week, demand for the borough remains incredibly strong versus the pre-pandemic average, trending approximately +60% above that number over the past 6-months and higher this week by +34%.
New Development Insights
As reported by Marketproof, this week, 44 new development contracts were reported across 35 buildings. The following were the top selling new developments of the week:
- THE BROAD EXCHANGE BUILDING (FiDi)
- 450 WASHINGTON (Tribeca)
- THE WALES (Carnegie Hill)
- CENTRAL PARK TOWER (Midtown),
- VANDEWATER (Morningside Heights)
Please contact me if you would like to learn more about these, or other new developments.
We will continue sharing the Elegran Insights data analysis with you every week.
Our goal is simple: to humanize the world of real estate. Michael Rossi founded Elegran in 2008 on the dual premise of motivation and innovation, with a third sustaining principle added over the years: care. Unique in the industry as an independently owned brokerage with agents known as “advisors” and a data-centered approach, the firm has become a key player in the New York brokerage world. The exclusive NYC member of the invitation-only Forbes Global Properties network, Elegran oversaw well over $500 million in sales volume in 2019, tripled market share in 2020 and sold US $1B in 2021.Headquartered in the center of Manhattan, Elegran is solely dedicated to serving the incomparable needs of the New York City metropolitan region. For more information about Elegran, visit www.elegran.com.