In June, Manhattan proved its mettle, while Brooklyn melted somewhat.
New development sales notched a fifth straight month above pre-pandemic levels, despite persistently higher interest rates and a dip in the luxury market.
For the first time since 2018, Manhattan took more than 60 percent of market share for new development sales, “highlighting its recent strength despite decreasing inventory,” said Marketproof CEO Kael Goodman in a new report.
Buyers in the borough signed 151 development unit contracts last month, eight percent less than the month prior, and five percent below levels of last June, when mortgage rates were comparable to today.
“While mortgage rates have increased, demand is as strong as it was pre-pandemic,” echoed Stephen Kliegerman, President of Brown Harris Stevens Development Marketing. “For every three new development units released onto the market, four contracts are signed.”
Manhattan signings were steady despite a decline in the overall luxury market, which slumped 30 percent in June, according to the Marketproof report. (The high-end market is nearly mirroring last year’s on a quarterly basis.) Meanwhile, new development sales in Brooklyn fell below the borough’s pre-pandemic average as well as its 12-month sales average.
In June, Manhattan signings dipped 5 percent below last year’s level, while new contracts fell 35 percent in Brooklyn over the same period of time, according to the brokerage Serhant.
Top selling buildings in Manhattan were in Midtown and Lenox Hill. Rabina Properties’ 520 Fifth Avenue reported 27 new contracts in its second month of sales, and the Zeckendorfs’ Treadwell building reported eight new contracts, respectively.
The number of luxury signings fell 28 percent in June, and projected earnings declined nearly 50 percent. Still, one buyer kept the faith, paying $115 million for an apartment at Extell Development’s Central Park Tower, more than $9,000 per square foot. At the Giorgio Armani Residences in Lenox Hill, SL Green put a $24 million apartment into contract.
Floor plans were enough for buyers at Extell’s new condo development under construction on the Upper West Side. Six new contracts, each for over $4 million, were signed last month.
Bucking the trend, Upper Manhattan commanded a higher price per square foot than Lower Manhattan for the quarter ending in June, according to data from Brown Harris Stevens, thanks in part to sales at the Vandewater and Claremont Hall on West 122nd Street.
As supply declines in Manhattan, “the forefront of the next building cycle” approaches, said Robin Schneiderman, managing director at BHS Development Marketing. Apartments with one or two bedrooms priced below $3 million are undersupplied, according to data from the firm, while studios and the $10 million to $20 million luxury band are oversupplied.
The picture was different in Brooklyn. In June, new contracts fell 35 percent from last June, while Manhattan signings dipped only 5 percent, according to the brokerage Serhant.
In Brooklyn’s luxury market, no luxury new development contracts closed last month.
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Hudson Companies put three units into contract at 1 Clinton Street in Brooklyn Heights. Each apartment listed for more than $4 million, although the developer trimmed the listing prices about 6 percent off its most recent offering price. The building is one sale shy of selling out.
Overall, the number of new contract signings fell in the outer borough in June to 66 from 93 the month prior. Top sellers were along the Greenpoint waterfront at 29 Huron Street, and in East Williamsburg at 392 Graham Avenue.
In Queens, where contract reporting can be spotty, it was no surprise that Long Island City proved most desirable. Buyers signed six new contracts at Chris Jiashu Xu’s Skyline Tower, which has sold nearly 90 percent of its 800 units in the last five years.