New condo sales dip below pre-pandemic levels
September was gut check time for developers offering new product
In New York’s new development market, there’s a chill in the air.
Contracts signed for new condominium apartments fell in September to below pre-Covid levels in Manhattan, Brooklyn and Queens, according to data from Marketproof.
It was the first month since January that such deals fell below their average from 2015 to 2019.
The slump ends a relatively good run for new condo contracts which, powered by all-cash buyers and developers motivated to sell, has been a bright spot in the city’s home sales market.
“September results were mixed,” said Marketproof’s Kael Goodman. “High mortgage rates have had an impact but there is still so much cash out there.” About 68 percent of new development sales were completed without mortgage financing, according to Goodman.
Only the luxury submarket, consisting of new units priced at $4 million and above, outperformed its pre-pandemic average. Even so, it was the worst month in at least a year for such deals, with just 26 contracts signed.
Back on terra firma, Related’s Tribeca Green, a rental-turned-cooperative in Battery Park City, and Extell’s One Manhattan Square, an 815-unit offering in Two Bridges, were the top selling projects. Related reported 11 signed contracts and Extell reported seven at the Lower Manhattan buildings.
The median price of a new condo in the central borough rose from August to $2.36 million. The median price per square foot grew to $2,049.
September closed a weaker quarter overall for new development, with 40 percent fewer contract signings from the prior quarter, and 30 percent fewer than the third quarter of last year, according to a Brown Harris Stevens Development Marketing report.
Company president Stephen Kliegerman blamed “increasingly low supply, very few buildings launching, and buyers still adjusting to the new mortgage rate landscape.” Rates hit a 23-year high last week.
In Brooklyn, the median asking price was stable at $1.08 million, and the median price per square foot was $1,282, largely unchanged from August. Top sellers in the borough included Extell’s Brooklyn Point and Tishman Speyer’s 11 Hoyt Street, which each recorded three contracts. Both projects are in Downtown Brooklyn.
The new development market in Brooklyn and Queens has recently gained momentum thanks to lower prices and higher inventory in the outer boroughs. In Manhattan, just 5,000 unsold new condos remain, enough inventory for 47 months’ of sales at the current pace, according to Marketproof. Overall, there are fewer than 11,000 unsold condos in New York City.
Fortis inked a deal for the priciest unit, an apartment at the Olympia Dumbo building asking $2,389 per square foot.
In Queens, the median price per square foot held stable at $1,350. Top sellers included BK Development’s 50-07 5th Street, with six contracts, and SB Development’s Nova building at 29-28 41st Avenue, with five. Both are in Long Island City.
Chris Xu’s Skyline Tower had the priciest unit in Queens go into contract, at $1,900 per square foot.