When Bad News Is Good News
Sometimes, bad news for the economy spells good news for the markets. This dynamic was observed last Friday when a weaker-than-expected jobs report uplifted the equities market, fostering expectations that the Federal Reserve might cut interest rates sooner.
In the New York City real estate market, we are witnessing an increase in inventory and a slowdown in contract signings as the market approaches the end of the traditionally busy spring season. Rising interest rates have deterred some potential buyers, leading to sluggish sales and shifting market leverage back toward buyers.
Key developments this week include:
- Manhattan: Contract volume decreased by 12%, reversing the gains from the previous week. Inventory levels continue to rise, exceeding 7,000 units for the second consecutive week—the first occurrence since last fall. This indicates an expansion in available properties, though it is still below the levels seen in May of the previous year.
- Brooklyn: Contract volume decreased 5%, but the borough continues to outperform historical benchmarks. Inventory levels have remained stable, though they are approximately 4% lower than in May 2023.
- The Elegran | Forbes Global Properties NYC Consumer Sentiment Index scored +5.
The real estate market is shaped by a complex interplay of economic and geopolitical factors influencing buyer and seller behaviors, reflecting the broader uncertainties affecting global markets.
Manhattan Supply
Inventory in Manhattan grew by 1.75% as 471 new listings came to market. While there's been a fresh wave of listings, overall supply is still down about 3% year-over-year.
Manhattan Supply | Data courtesy of UrbanDigs
Brooklyn Supply
The inventory level was unchanged this week at 3,142 units as the number of new-to-market units (235) was canceled out by the number going into contract and taken off the market.
Brooklyn Supply | Data courtesy of UrbanDigs
Manhattan Pending Sales
Pending sales activity ticked up slightly this week, increasing by nearly 1% to 2,937 units.
Brooklyn Pending Sales
Pending sales increased by 1.2% to 1,896 units this week.
Manhattan Consumer Sentiment
This week, Manhattan’s score on the Elegran | Forbes Global Properties Manhattan Consumer Sentiment Index decreased from -7 to -21, as 202 contracts were signed, a 12% decrease from last week. The Sentiment Index continues to be in negative territory for the fourth week as contract activity is comparatively light for the spring season.
Brooklyn Consumer Sentiment
This week, Brooklyn’s score on the Elegran | Forbes Global Properties Brooklyn Consumer Sentiment Index decreased from +72 to +63, as 135 contracts were signed, a 5% decrease from last week.
New Development Insights
Marketproof reported that 48 new development contracts were signed in 33 buildings this week. The following buildings were the top-selling new developments of the week:
- Lucent 33 (LIC) reported 8 contracts
- Skyline Tower (LIC) reported 4 contracts
- One High Line (West Chelsea) reported 3 contracts.
