Did Bank Panic Spill Over Into NYC Residential Real Estate? This Week Was the Litmus Test
This week, we anxiously watched the contract numbers in light of Silicon Valley Bank’s collapse. But why, when news of the bank fallout is now over one week old?
Well, because a signed contract is a week to 10 days in the making, which means that contracts reported last week (immediately following the bank headlines) may have been too far along to abandon ship. Many were likely already signed by the buyer before the SVB bailout and were awaiting the seller’s signature.
Because of this, we believe this week was the true litmus test for what effect, if any, the bank drama had on NYC residential real estate. And the result?
Fewer contracts were reported than last week, but this week’s tally was still significantly higher than the pre-pandemic average*. We believe it’s now safe to suggest that panic in the banking sector did not spill over into the loosely correlated residential real estate sector, at least not here in NYC.
* the period 5 January 2015 to 1 March 2020
Manhattan Supply
The chart below serves as an almanac, and this year is shaping up just like years past. Spring’s supply increase is more gradual en route to the June peak, whereas fall’s bounce to the October peak is more abrupt. Not surprisingly, the metric was higher again this week, from 6,510 to 6,623 units, including 431 new listings.
Chart Courtesy of UrbanDigs
Brooklyn Supply
Exhibits a bi-annual cycle, though it’s not as apparent without Manhattan’s depth of historical data to illustrate the trend. As we expected, the metric increased this week from 3,005 to 3,037 units, including new listings up from 192 to 222.
Chart Courtesy of UrbanDigs
Manhattan Pending Sales
Like the supply “almanac,” the historical pending sales chart provides us with a clear picture of what to expect. Any deviation from the large peak in June and the smaller peak in December would certainly qualify as “news” and be reported. As expected, the metric increased week over week from 2,479 to 2,595 units.
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 then reversed direction. We can also predict that the first of two peaks this year should occur in June. This week, the metric increased from 1,541 to 1,565 units.
Chart Courtesy of UrbanDigs
Manhattan Contracts Signed
After spending July 2022 to January 2023 below the historical average (the average weekly number of signed contracts from January 5, 2015, to March 1, 2020), demand for Manhattan has now remained above that average for the past seven weeks. This week, signed contracts decreased from 274 to 235.
Brooklyn Contracts Signed
Brooklyn is peaking once again since the pandemic. After briefly touching in mid-January the pre-pandemic average (the average weekly number of signed contracts from January 5, 2015, to March 1, 2020), which has become the metric’s support level for the past two years, signed contracts have skyrocketed above that average. Week over week, contract volume increased from 138 to 155.
New Development Insights
As reported by Marketproof, 67 new development contracts were reported across 52 buildings this week. The following were the top-selling new developments of the week:
- 300 WEST 30 STREET (Chelsea)
- 450 WASHINGTON (Tribeca)
