Week of 6/5/23

Resilient Demand Amid High Interest Rates

Despite mortgage rates nearing 7%, New York City's real estate market continues to defy expectations, with demand soaring above its pre-pandemic average* for the 17th consecutive week.

The strong spring season has set the stage for a resilient market that is extending its momentum into the summer months. Potential buyers are undeterred by persistent price levels and rising interest rates, particularly luxury buyers who are cash buyers and less affected by mortgage rate fluctuations. The past year of higher interest rates has also created pent-up demand, as buyers realize that waiting for price drops and lower rates may no longer be advantageous.

Brace yourself for an unusually active summer market fueled by robust demand.

* the average weekly number of contracts signed during the period January 5, 2015 to March 1, 2020.

Manhattan Supply:

In Manhattan, the supply count for real estate units currently stands at 7,584. This number is expected to peak sometime in June. While low supply can drive up prices in other markets, the ample availability of units in Manhattan indicates that supply is not a factor contributing to increased pricing. Despite the high demand with 205 contracts signed, the supply remains sufficient to meet the weekly demand. The historical data suggests that Manhattan's supply follows a bi-annual cycle, and the current supply count aligns with past trends.

Brooklyn Supply:

The current supply count in Brooklyn has increased to 3,332 units, and it is expected to reach its peak before the end of June. Like Manhattan, the supply-to-demand ratio alone is not driving up prices as more units are available than needed to meet the weekly demand of 132 units. While Brooklyn's supply cycle may not be as apparent as Manhattan's due to the lack of extensive historical data, the current increase in supply aligns with the expected trend.

Manhattan Pending Sales:

This week, the number of pending sales decreased from 3,271 to 3,183 units, marking the first week-over-week decline in pending sales since early February. This data indicates that Manhattan's market is transitioning from its peak, signaling a potential shift in buyer activity.

Brooklyn Pending Sales:

The pending sales activity in Brooklyn follows a similar pattern to Manhattan. This week, Brooklyn's pending sales decreased from 2,037 to 2,023 units, indicating that the borough has also reached its first peak. This week-over-week decrease, the first since early February, indicates a cyclical trend where a trough in February leads to a subsequent peak in June. The continuous upward trend in pending sales following the trough highlights robust buyer activity. With the recent decline, a new shift is beginning to emerge in Brooklyn's real estate market.

Manhattan Contracts Signed:

The number of contracts signed in Manhattan this week reached a total of 205, just slightly surpassing the pre-pandemic benchmark. This benchmark represents the average weekly number of signed contracts from January 5, 2015, to March 1, 2020. While the number remains in line with historical averages, it reflects a positive sign of market stability and suggests continued activity in Manhattan's real estate sector.

Brooklyn Contracts Signed:

Brooklyn's real estate market is demonstrating remarkable resilience as the number of contracts signed continues to climb. This week, 132 contracts were signed, indicating a strong buyer demand. Notably, Brooklyn is experiencing its sixth consecutive peak since the pandemic, with the metric briefly touching the pre-pandemic average in mid-January and surpassing it ever since. This week's signings showcase the sustained momentum in the market.

New Development Insights:

As reported by Marketproof, this week, 64 new development contracts were reported across 46 buildings. The following were the top-selling new developments of the week:

• 435 TOMPKINS AVENUE (Bed Stuy) reported 5 contracts
• ONE HIGH LINE (West Chelsea) reported 3 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.

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.