Week of 10/2/23

Anticipating the Uptick: Unraveling the Lag in NYC's Fall Real Estate Data

This week, the Elegran | Forbes Global Properties NYC Consumer Sentiment Index has yet to reflect the anticipated increase in buyer activity typically associated with the beginning of fall. Current data indicates a -6 score, showing demand is still 6% weaker than the pre-pandemic period. However, it’s essential to understand the nuanced relationship between real-time market dynamics and the inherent lag in reported data.

Transactions are often reported 7-10 days after buyer and seller reach an agreement, meaning the data we review is a reflection of the past week’s activity. We anticipate that the real-time demand is already aligning with seasonal trends, showing increased activity, but this shift will only be visible in the reported data over the next couple of weeks.

The supply metrics in Manhattan and Brooklyn, and the pending sales numbers, further elaborate this narrative. We’re witnessing the early signs of change, though the full impact of the fall season is yet to be captured in the data due to the inherent reporting lag.

So, while the immediate data doesn’t display a market upswing, it’s a prelude to the forthcoming market dynamics that are likely already in motion. We anticipate seeing a shift in the data in the coming weeks that aligns with the increased activity typically associated with the fall season.

Manhattan Supply

Manhattan's real estate supply is experiencing a notable uptick this month, a development that signifies a market in transition. After bottoming out in early September, the inventory has begun its upward trajectory, projected to reach a peak by late October. With the current supply-to-demand ratio showcasing 7,095 available units and only 138 sold, prospective buyers are presented with an ample array of choices. 

This enriched pool is particularly enticing for those who waited through the summer for more variety. As inventory climbs, an increase in buyer interest and closed contracts is anticipated, marking a transition into a vibrant fall transaction season.

Brooklyn Supply

Brooklyn’s real estate landscape is mirroring a similar trend of growth in supply, indicative of a market responding to the onset of the fall season. After reaching a low at 2,995 units about a month ago, the inventory has made an upward climb, registering 3,266 units this week.

For buyers, the increased inventory translates to a wider array of options. For sellers, this means we are entering a marketplace teeming with engaged prospects, indicating that every listing will likely receive its fair share of attention. 

Manhattan Pending Sales

The numbers in Manhattan pending sales have tapered, descending from 2,706 to 2,600 units. However, this decline is a typical seasonal adjustment, not a cause for concern. While the calendar marked the end of summer last week, the real estate market often lingers in the summer’s slow pace for a bit longer.

This is precisely what we're observing. Pending sales are our lens to view current demand, but it’s crucial to recognize the inherent lag due to reporting timelines. Fall has arrived, and traditionally, we’d be witnessing a resurgence in demand. However, the data, influenced by this lag, isn’t showcasing this just yet. But anticipate a shift! As we move deeper into the weeks of fall, we expect the data to catch up, reflecting the renewed market activity synonymous with this season. 

Brooklyn Pending Sales

Brooklyn's pending sales are echoing a pattern similar to Manhattan, with a minor contraction witnessed this week — The numbers have shifted down from 1,904 to 1,856 units.

In the broader context, this decrease isn’t indicative of a declining market, but rather seasonal adjustment. We are at the junction where the residual effects of summer's slower pace are still perceptible in the data, yet the energetic pulse of fall is just around the corner. As with Manhattan, it’s essential to consider the lag associated with reporting. The real-time vibrancy of the Brooklyn market, sparked by the onset of fall, is yet to be captured in the reported data. In essence, this temporary contraction in Brooklyn's pending sales is a prelude to the anticipated resurgence of the market. 

Manhattan Consumer Sentiment

Manhattan's consumer sentiment is currently in the red at -18, reflecting a lingering caution among buyers. However, a positive sign emerges as 138 contracts were inked this week, up from 129 the preceding week. This modest yet encouraging rise signals a reawakening market pulse.

Contextualized against the typical end-of-summer lull, this sentiment is not anomalous. The market, while echoing the quietness of summer’s end, is also showcasing glimpses of an upcoming uplift. As the city hums with ongoing developments and the market gradually steadies, a transition into the brisk energy of fall is anticipated.

Brooklyn Consumer Sentiment

Brooklyn's consumer sentiment is at +24, down from +40 last week, yet still signaling positivity among buyers. The 91 contracts signed this week, though fewer than last week’s 98, point to enduring buyer interest. This decline is a typical fluctuation and not an indication of a weakening market. The sentiment’s overall strength, sustained since July 2020, highlights a resilient market. Each shift in sentiment offers insights into the market's adaptability and ongoing strength, promising opportunities for both buyers and sellers.

New Development Insights 

Marketproof reported that 35 new development contracts were signed in 23 buildings this week.  The following buildings were the top-selling new developments of the week:

• ONE MANHATTAN SQUARE (Two Bridges) 

Reported 10 contracts.

• 22 BOND (NoHo), 
• Tribeca Green (Battery Park City) 
• 450 Washington (Tribeca) 

Each reported 2 contracts.

If you would like to chat about the most recent market activity, feel free to contact us at info@elegran.com or connect with one of our Advisors.

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