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Low supply chokes activity in Manhattan, Brooklyn

High interest rates are keeping listings off the market and prices high

Supply Shortage Chokes Manhattan, Brooklyn Resi Markets
(Photo Illustration by The Real Deal with Getty)

Activity in the Manhattan and Brooklyn markets is being constrained by a precipitous drop in new inventory coming online. 

New listings in August in Manhattan were down 59 percent over 2019, the last year before the pandemic upended the real estate market, according to data collected by Miller Samuel for Douglas Elliman. In Brooklyn, they were down nearly 50 percent. 

“That is not unique for New York, this is something we’re seeing nationwide to various degrees,” said report author and Miller Samuel CEO Jonathan Miller. “But it does illustrate that Manhattan has not been immune to the lack of supply in the market.” 

New listings across both boroughs and all three property types tracked by Miller Samuel — co-ops, condos and one-to-three family buildings — have fallen month-over-month since May.

“It’s either the lack of affordability or the lack of inventory restraining activity in the market across all price points,” said Miller. “Both boroughs are very similar.”

The high interest rate environment is the root cause of the low inventory, which contributes to high prices. Potential sellers locked into low mortgage rates aren’t listing, so supply isn’t keeping up with demand. That keeps prices high even though activity is constrained. 

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New signed contracts for Manhattan co-ops and condos saw a slight uptick month-over-month, though co-op contracts fell compared to last August, to 371 from 408. 

Condo contracts dropped 24 percent year-over-year, to 250 from 329.  Listings for condos fell to 337, their fifth consecutive month of decline and a drop of 11 percent from last year’s 379. New listings for co-ops also fell monthly for the fourth time, down to 336, a 21 percent drop from last year’s 425.

Signings for one-to-three family buildings fell to six, their lowest point since February and a 54 percent drop from last August’s 13. New listings fell slightly to 17 month-over-month, a decline of one from last year.

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In Brooklyn, new listings and contracts fell across the board month-over-month, except condo signings, which held even at near winter lows. New co-op signings fell sharply for the fourth month in a row to 71, down 36 percent from last year’s 111. Condo contracts held steady at 121, down from 194 last August, a drop of nearly 38 percent. Signings for one-to-three family buildings fell to their lowest point in at least a year at 59, down 64 percent from last August’s 163.

New co-op listings dropped slightly month-over-month to 97, down from 165 last year, a drop of 41 percent. New condo listings fell sharply for the fourth straight month to 121, down from 194 last year, a fall of 30 percent. New one-to-three family listings also fell for the fourth consecutive month to 112, down 55 percent from last year’s 251, to reach their lowest levels in at least a year. 

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BrooklynDouglas EllimanManhattan