Manhattan market cools as mortgage rates rise; Brooklyn busier

Some signs of inventory shortage easing

(iStock/Illustration by Kevin Rebong for The Real Deal)
(iStock/Illustration by Kevin Rebong for The Real Deal)

With mortgage rates on the rise, Manhattan’s residential market took a breather in April.

Contract signings to buy co-ops declined 6 percent from a year ago, while for condos they edged down 0.6 percent, according to a report by Douglas Elliman compiled by Miller Samuel.

The shortage of available homes eased, as was expected for the spring selling season, but compared with last April, new listings declined 3 percent for co-ops and increased by less than 1 percent for condo units.

One month does not make a trend, noted Jonathan Miller, the author of the report, but April might indicate some stabilization of what has been a fiercely competitive Manhattan market.

“Low rates have obliterated supply,” Miller said “And with rising rates, we’re starting to see inventory climb, and that’s because some of the edges have been taken off the sales frenzy.”

Not all contracts lead to sales, but signings indicate where sales numbers will go in the coming months.

Read more

Sign Up for the undefined Newsletter

Deals for one- to three-family homes jumped 63 percent, but the number of them is small — 31, up from 19 a year ago — so such fluctuations are more common. For comparison, 762 co-ops and 523 condos entered into contract last month.

Brooklyn’s market was busier. There was a 16 percent increase in co-ops entering into contract and a 4 percent decrease in condos. Deals for one- to three-family homes were up 61 percent.

“Brooklyn as a market has been consistently strong, whereas Manhattan really woke up last year,” Miller said. “In many ways, the comparison against a year ago continues to be somewhat distorted because of the surge that we saw last year at this time.”

Take the Hamptons, where demand has been strong since early in the pandemic: New signed contracts for single-family homes plummeted 51 percent in April from 12 months earlier. For condos, it was down 67 percent, because so little was for sale. That was good for sellers as the market has broken price records nearly every quarter and demand remains strong.

New listings in the Hamptons for single-family homes decreased by 16 percent and, for condos, by 40 percent.

On Long Island excluding the Hamptons and the North Fork, signed contracts for single-family homes declined month-over-month for the first time in three months.

Year-over-year, contract signings for single-family homes fell by 12 percent and by 5 percent for condos.