Bye bye, sugar high: New dev contracts slow in June

It was fun while it lasted.

Contract activity slowed across New York’s new developments in June, according to a report from Marketproof. In all, buyers signed 264 contracts, a 26 percent drop from May’s 359 deals.

While the numbers show that the market’s sugar high is over — a combination of higher mortgage rates and the end of the spring selling season — some see it as a return to pre-pandemic normalcy.

“Some analysts are sounding the alarm for a correction, but with overall pricing still above 2019 levels, it’s too soon to call this a downturn,” said Kael Goodman, co-founder and CEO of Marketproof.

The slowdown has been concentrated at the lower end of the market for new condo apartments, where buyers are more sensitive to mortgage rates. Ultra-luxury buyers aren’t as reliant on borrowing or care less about its expense.

The combination of factors pushed the median unit price for signed contracts up to $1.6 million, a 15 percent increase from May, and allowed pricing to inch up slightly to $1,753 per square foot. Those numbers are based on asking prices; the sale prices, available after deals close, will be lower.

Manhattan accounted for just over half of the city’s contracts in June with 137 deals for units asking an average of $4 million. The volume is down significantly from recent months, yet compared with June 2019, it is up 36 percent. Aggregate dollar volume is up 17 percent in the same time span.

The month’s priciest unit to go into contract was a $26.5 million penthouse in Beckford House & Tower, Icon Realty Management’s two-building condo development on the Upper East Side. The buildings are both 94 percent sold, according to Marketproof.

The Cortland — Related Companies’ Chelsea condominium designed by Robert A.M. Stern — kicked off sales with two big-ticket contracts, for a $23.5 million five-bedroom apartment and a $16.75 million three-bedroom.

Aman New York Residences, OKO Group’s ultra-luxe development near the Plaza, posted several eye-popping closings, likely from contracts signed months ago. Yesterday, TRD reported that a mystery buyer dropped $76 million on a full-floor residence in the building, easily one of the year’s most expensive deals. Aman also recorded $56 million and $29 million sales last month.

While all three sold for less than the asking price, they put Aman in an exclusive club of residences that can command such astronomical prices.

“Aman has reached that level where it becomes a trophy asset that gets traded among a handful of buyers,” Goodman said.

Brooklyn had a rougher go of things. Contract activity in the borough slipped below 2019 levels as it recorded its worst month of the year. New developments posted 90 sponsor contracts, a 16 percent decline from June 2019.

While median unit price increased as it did in Manhattan, aggregate dollar volume based on asking prices fell slightly from May.

Even though numbers were grim for the borough overall, some of its brightest stars continued to shine. Olympia Dumbo grabbed two of the top three contracts, for units asking $5.4 million and $4.9 million. The development, by Fortis Property Group, has pursued record-setting prices per square foot and so far has succeeded.

As for actual closings in Brooklyn, CIM and LIVWRK’s Front & York scored the biggest deals. The two-tower development in Dumbo snagged the top three closings, the largest of which yielded the asking price of $8.8 million. The original offering plan, in July 2019, priced the unit at $7.8 million.

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Activity wasn’t much better in Queens. New developments reported just 37 contracts, a 21 percent drop from May and slight decrease from June 2019.

For the first time in recent months, Skyline Tower didn’t appear in the top three contracts reported. Instead, smaller developments like BK Developers’ Anable in Hunter’s Point led the way.

“A lot of things are changing right now — we’re in the middle of it,” Goodman said. “Where things land is still unclear.”