Week of 8/7/23

Unprecedented Strength in Consumer Sentiment Fuels NYC Real Estate

In this week's Market Update, we focus on the impressive strength of consumer sentiment over the summer. Brooklyn has been particularly robust, counterbalancing a modest performance in Manhattan.

The Elegran | Forbes Global Properties NYC Consumer Sentiment Index has slightly risen from +34 to +35. This signifies that the sentiment towards NYC real estate is now 35% more positive than the pre-pandemic period. Brooklyn steals the show with a score of +123, while Manhattan stays level at 0, mirroring pre-pandemic sentiment. Even with possible market shifts due to the return of global travel, we foresee the high demand, especially in Brooklyn, carrying on through the fall.

If you're considering buying or selling, or simply a keen market watcher, continue reading for a compelling insight into the heartbeat of NYC's real estate market.

Manhattan Supply

In this week's analysis of Manhattan supply, there is a notable decrease. As predicted, the supply fell from 6,795 to 6,553 units this week. This trend is heading towards a low point in September. The importance of the supply count lies in its influence on pricing. Currently, many national markets are experiencing low supply, which often exerts upward pressure on prices. However, with Manhattan's supply standing at 6,553 units and a maximum weekly demand of approximately 400 contracts, we don't expect supply to push prices up significantly in the near term.

Brooklyn Supply

Turning our attention to Brooklyn, this week also saw a drop in supply, mirroring the trend in Manhattan. The supply count went down from 3,216 to 3,155 units as it progresses towards a late summer low. Despite Brooklyn's more limited historical data, it's clear that the borough too follows a bi-annual cycle. In terms of pricing, the supply-demand ratio should not induce a rise, given that there are more units available than required to meet a maximum weekly demand of around 200 units.

Manhattan Pending Sales

Taking a look at pending sales in Manhattan, we're seeing expected seasonal changes. There's been a decrease in the metric from 3,177 to 3,043 units this week. By looking at past patterns, we expect to see a dip around this time of year, with the trough typically occurring in October.

Brooklyn Pending Sales

Shifting focus to pending sales in Brooklyn, there's a similar trend to Manhattan with a recent drop from 2,199 to 2,093 units this week. Brooklyn typically hits two annual peaks in pending sales, and we have recently seen the first of these. As per the trend, we should expect the numbers to continue to decline through October. 

Manhattan Consumer Sentiment

Looking at the Manhattan Consumer Sentiment this week, the Elegran | Forbes Global Properties Index shows a score of 0, falling from +7 last week. This suggests that current attitudes towards Manhattan residential real estate are in line with the seasonally adjusted pre-pandemic average. The sentiment has been fluctuating throughout the year. This week, Manhattan recorded 187 contracts, reflecting the par consumer sentiment towards the borough's real estate market.

Brooklyn Consumer Sentiment

On the Brooklyn front, the Elegran | Forbes Global Properties Index shows a significant consumer sentiment score of +123 this week, marking an increase from last week's +99. This score suggests that the consumer sentiment towards Brooklyn's residential real estate is 123% stronger than its seasonally adjusted pre-pandemic average. This continued positive sentiment, which has been the trend since July 2020, is reflected in the 154 contracts signed this week. This implies a strong market interest and a consistently robust demand for properties in Brooklyn.

New Development Insights 

As reported by Marketproof, this week, 65 new development contracts were reported across 48 buildings.  The following were the top-selling new developments of the week:

• 50-07 5TH STREET (Hunter’s Point) 
• ONE MANHATTAN SQUARE (Two Bridges), 
• 490 LORIMER STREET (East Williamsburg), and 
• THE GREENE (Long Island City)