Week of 5/30/23

Contracts Surge to New Heights Amid Underreporting Controversy

Last week saw the highest number of Manhattan contracts signed in more than a year!

This exciting development not only highlights the dynamic interplay between supply and demand but also provides valuable insights into the market's stability when considering previously unreported contracts. Moreover, notable shifts in supply trends indicate that traditional peak periods may be evolving, presenting alluring opportunities for buyers and investors.

Amidst the enthusiasm, it is essential to address the underreporting of contracts by certain developers, which has sparked a conversation about the reporting rules governing their practices. This discussion brings attention to the need for transparency and accuracy in contract reporting.

Let’s delve into the key insights from these vibrant markets, where this historic surge in contract signings has set the stage for a new era of possibilities.

Looking at the first chart, we are led to believe that there was an extraordinary surge in demand this week. However, it's crucial to note that this spike is exaggerated due to the underreporting of contracts in previous periods.

By making the necessary adjustments in the second chart, we gain a clearer understanding of the true demand trends over the past four weeks. These adjusted figures reveal that demand has remained consistently robust and stable during this period.

Manhattan Supply: 

Manhattan's supply experienced notable changes in the past week. The supply decreased from 7,581 units to 7,550 units, indicating a slight reduction. However, it is essential to consider the context of the market. As we approach the typical peak season in June, the supply may have reached its first high point of the year. Despite the decrease, the supply count remains significant, and it is worth noting that the current supply does not exert upward pressure on pricing, as demand continues to outpace the available units. This suggests a favorable environment for buyers and investors in Manhattan's real estate market.

Brooklyn Supply:

Brooklyn's supply experienced changes in the past week, with a decrease from 3,287 units to 3,265 units. This decline indicates a slight reduction in available inventory. Although Brooklyn's supply trends may not be as apparent as Manhattan's due to differences in historical data, it is worth noting that the supply-to-demand ratio remains favorable for buyers. With a weekly demand of 161 units and a supply of 3,265 units, there are more than enough options to satisfy the market's needs. This suggests a balanced market where buyers have a range of choices and opportunities in Brooklyn's real estate landscape.

Manhattan Pending Sales:

Manhattan's pending sales, a key indicator of market activity, witnessed a significant increase in the past week. The metric rose from 3,143 units to 3,271 units, highlighting a notable surge in pending transactions. This upward trend aligns with the typical pattern observed during the spring season. As Manhattan heads towards its first peak, the rise in pending sales indicates a robust market and strong buyer interest. This positive momentum suggests a favorable outlook for future closed sales and underscores the resilience and strength of Manhattan's real estate market.

Brooklyn Pending Sales:

Brooklyn's pending sales experienced a positive trend in the past week. The metric saw an increase from 1,971 units to 2,037 units, signaling a rise in pending transactions. This pattern follows the anticipated seasonal cycle, with a February trough and a subsequent reversal leading toward the first peak expected in June. The growth in pending sales indicates healthy market activity and ongoing buyer engagement in Brooklyn.

Manhattan Contracts Signed:

Manhattan witnessed a remarkable surge in the number of contracts signed during the past week. The reported contracts reached the highest figure seen in over a year, signifying a significant milestone.

*However, this surge can be attributed to the inclusion of previously unreported new development contracts, which were recently batch-reported.

Adjusting the data to account for these underreported contracts, as seen in the second chart, the market's stability over the past few weeks becomes more apparent. Even after making the necessary adjustments, the week's contract activity remains strong and surpasses the average weekly number of signed contracts before the pandemic. This indicates the ongoing strength and resilience of the Manhattan real estate market.

Brooklyn Contracts Signed:

Brooklyn's contract activity continued to display a strong upward trend in the past week. The number of contracts signed remained robust, with a total of 161 deals signed. This sustained level of contract signings marks the sixth consecutive peak since the onset of the pandemic. Notably, the metric briefly touched the pre-pandemic average in mid-January before skyrocketing further. The consistent and significant number of contracts signed in Brooklyn underscores the enduring demand for real estate in the borough and showcases its resilience and attractiveness to buyers and investors.

New Development Insights:

"Underreportgate" has taken the real estate market by storm this week, as a significant number of previously unreported new development contracts have surfaced. This revelation has sparked a flurry of activity and discussions within the industry. The undisclosed contracts, totaling a remarkable 177 across 49 buildings, according to Marketproof, have added a thrilling twist to the market's narrative. Among the developments involved, TRIBECA GREEN in Battery Park City, reported 76 contracts, while NOVO LIC in Long Island City recorded 27 contracts. This unexpected turn of events has prompted a closer examination of contract reporting accuracy and timing.

The following were the top-selling new developments of the week:

• TRIBECA GREEN (Battery Park City) reported 76 contracts, most of which were likely signed previously but not reported until now.
• NOVO LIC (Long Island City) reported 27 contracts, also an apparent case of previous underreporting.

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.

About Us

Our goal is simple: to humanize the world of real estate. Michael Rossi founded Elegran in 2008 on the dual premise of motivation and innovation, with a third sustaining principle added over the years: care. Unique in the industry as an independently owned brokerage with agents known as “advisors” and a data-centered approach, the firm has become a key player in the New York brokerage world. The exclusive NYC member of

Weekly Manhattan & Brooklyn Market: 5/15 6 the invitation-only Forbes Global Properties network, Elegran oversaw well over $500 million in sales volume in 2019, tripled market share in 2020, and sold US $1B in 2021. Headquartered in the center of Manhattan, Elegran is solely dedicated to serving the incomparable needs of the New York City metropolitan region. For more information about Elegran, visit www.elegran.com.