Elegran Insights: Weekly Manhattan & Brooklyn Market
For months, as mortgage rates averaged 6.4%, we expressed our surprise that the current demand was at parity with demand during the pre-pandemic period* when mortgage rates averaged 4.2%.
Mortgage rates have remained around 6.5%, so imagine our disbelief that demand has risen to well above that historical average.
Looking toward the future, what will the landscape look like when rates begin to recede? If economic principles prevail, demand should boom, new supply should not be able to keep pace with absorption, and prices should rise.
We’ve said it so many times before, but the repetitive nature of our squawking doesn’t dilute the message: Demand for NYC residential real estate is incredible.
* the period January 5, 2015, to March 1, 2020
Manhattan Supply
The chart below serves as an almanac, suggesting what we can expect. Spring’s supply increase is more gradual en route to the June peak, whereas fall’s bounce to the October peak is much more abrupt. Not surprisingly, the metric was up again this week to 6,282 units, including the 439 new listings that were posted.
Chart courtesy of UrbanDigs
Brooklyn Supply
Without Manhattan’s depth of historical data to clearly illustrate the trend, it still exhibits a bi-annual supply cycle. Although the new supply increased this week to 197 units, the total supply was down ever so slightly to 2,945 units, but the metric’s trend is still in the direction of a June peak.
Chart courtesy of UrbanDigs
Manhattan Pending Sales
Like the supply “almanac,” the pending sales chart provides us with a very clear picture of what to expect. Any deviation from the large peak in June and smaller peak in December would certainly qualify as “news” and be reported. As expected, the metric increased this week from 2,240 to 2,358.
Chart courtesy of UrbanDigs
Brooklyn Pending Sales
This week’s observation is the same as what we witnessed in Manhattan where, right on cue, the metric reached its seasonal February trough and has reversed direction. We can also “predict” that the first of two peaks this year should occur in June. This week, the metric increased from 1,495 to 1,502 units.
Chart courtesy of UrbanDigs
Manhattan Contracts Signed
After spending most of the past seven months under the historical average, demand for Manhattan has now remained above that average for the past four weeks. This week, 233 contracts were signed.
Brooklyn Contracts Signed
Brooklyn is peaking for the 6th consecutive time since the pandemic. After briefly touching the pre-pandemic average in mid-January, which has become the metric’s support level for the past two years, signed contracts have skyrocketed above that average. This week, 127 contracts were signed.
New Development Insights
As reported by Marketproof, 55 new development contracts were reported across 42 buildings this week. The following were the top-selling new developments of the week:
- 450 WASHINGTON (Tribeca)
- THE CORTLAND (West Chelsea)
- ONE WALL STREET (FiDi)
- MAVERICK (Chelsea)
