Last week, we decided that the recent downturn was nothing more than the typical seasonal slowdown and predicted that there would be no cause for concern.
How did we do as fortune tellers? Well, so far, so good, as the number of contracts signed this week was back to parity with the pre-pandemic average.
As our readers have certainly noticed, we continuously compare today’s demand to that during the period January 5, 2015, to March 1, 2020, which we refer to as the “pre-pandemic period”. Well, here’s another comparison and quantification we’ve suggested but never explicitly.
The average mortgage rate during that historical time frame was roughly 4.1%. The current rate is approximately 6.2%. So, rates today are 50% higher, yet demand is the same.
Take a moment and let that sink in.
Demand for NYC residential real estate may be normal but, at the same time, buyer determination is stronger.
Manhattan Supply
As the shape of the curve clearly illustrates year after year, supply is crawling out of its Winter hibernation towards the Sprint peak, up this week to 6,057 units, including the 313 new listings that were posted. We still want to highlight the bi-annual peak/trough cycle, which makes it easy to predict supply trends.
Chart courtesy of UrbanDigs
Brooklyn Supply
Without Manhattan’s depth of historical numbers to clearly illustrate the trend, it still exhibits a similar bi-annual supply cycle. And, like Manhattan, supply is now off the winter low en route to the spring peak, at 2,889 units this week, including 170 new listings.
Chart courtesy of UrbanDigs
Manhattan Pending Sales
Historically, they reach their lowest level in February so, not surprisingly, the metric is down slightly this week to 2,137 units and should soon reverse course en route to the expected June peak. Like supply, we want to point out the bi-annual cycle, which makes for easy predictions.
Chart courtesy of UrbanDigs
Brooklyn Pending Sales
Without a historical pattern to reference, we’re left to assume that pending sales in Brooklyn follow those same patterns that describe Manhattan. As such, the metric, down to 1,447 units this week, should be approaching the seasonal February trough and will peak in June.
Manhattan Contracts Signed
This week, contracts were up significantly, from 112 to 162, pulling to within 15% of the historical average. This may mark the beginning of the end of the seasonal winter slowdown.
Brooklyn Contracts Signed
Four times previously, Brooklyn demand has briefly touched what has become its support level — the pre-pandemic average — only to rebound strongly. Over the past few weeks, demand has landed on that support level once again, and we asked whether another spike was imminent. It’s still too soon to say, but demand did bounce from +3% to +19% this week as signed contracts increased from 72 to 88.
New Development Insights
As reported by Marketproof, this week, 62 new development contracts were reported across 42 buildings. The following were the top-selling new developments of the week:
- The Greene (Long Island City)
- 300 West (Harlem)
- 300 West 30 Street (Chelsea)
- Brooklyn Point (Downtown Brooklyn)
