Icarus has finally crashed down to earth.
After a run in which New York’s new developments routinely posted more than 350 deals a month, activity fell solidly below pre-pandemic levels across the city in October, according to a new report from Marketproof. Developers reported 171 deals last month, down 20 percent from September and 36 percent from October 2019.
A small number of high-end deals somewhat buoyed prices, as contract activity in Marketproof’s “luxury” bracket — those last asking $4 million or more — only decreased by 10 percent month-over-month. The median unit price was $1.5 million, or $1,585 per square foot. Still, as rising rates threw cold water on entry-level buyers, overall contract volume plunged 19 percent to $407 million.
All told, October was the worst month for new developments in Manhattan and Queens in at least a year. While activity has been in decline for a few months, Kael Goodman, founder of Marketproof, says the market has been waiting for numbers to finally dip below pre-pandemic levels.
“We can say with some confidence now that we’ve reached that point,” Goodman said.
In Manhattan, developers reported 75 deals across 41 projects. Those units last asked a combined $278.2 million. While the number of contracts fell, pricing actually rose in the borough, as the median unit price increased 19 percent to $2.7 million. As mere wealthy buyers drop out, the ultra-high-end of the market continues to draw people who are less sensitive to rising interest rates, skewing average prices higher.
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Still, the highest asking price to go into contract last month was a $17 million penthouse at 150 East 78th Street, the Robert A.M. Stern-designed project by Midwood Investment and EJS Group. While that’s no slouch, it’s nowhere near the $50 million or more that buyers had been shelling out at the city’s top development earlier in the year.
“There was no Aman,” Goodman said, referring to Vlad Doronin’s Plaza District residences favored by captains of the universe-types.
Brooklyn fared slightly better than Manhattan as activity only decreased by one deal versus September to 79. Pricing also stayed fairly consistent, with the median unit price reaching $995,000 or about $1,300 per square foot.
Quay Tower notched a pair of deals above $4 million as a handful of Brooklyn buildings continue to draw Manhattan prices.
“With these new buildings entering the market, Brooklyn is now solidly in the $4-million-plus range,” Goodman said.