The number of homes for sale in Manhattan and Brooklyn has dropped sharply in recent months, making it a tough market for buyers. In Manhattan, new listings were down 59% in August compared to 2019, and in Brooklyn they were down 50%. It’s slim pickings.
The main reason for the low inventory is high interest rates. Many homeowners are locked into low rates from before the pandemic, and they're reluctant to sell their homes and give up those rates. Due to this there's not much new inventory coming onto the market, which is keeping prices stable in lieu of higher rates.
New signed contracts for Manhattan co-ops and condos saw a slight uptick month-over-month, but co-op contracts fell compared to last August. Condo contracts dropped 24% year-over-year, to 250 from 329.
Listings for condos fell to 337, their fifth consecutive month of decline and a drop of 11% from last year’s 379. New listings for co-ops also fell monthly for the fourth time, down to 336, a 21% drop from last year’s 425.
New Development New condo sales in New York City picked up steam in August after a drop in July. The number of sales increased by 5%, defying the typical summer slowdown. This surge is due to a number of factors, including lower prices and a shortage of resale properties in the city. The median price of a new condo unit has dropped by 6% since the pandemic began, and the price per square foot has fallen by 9%. As a result, there has been a 26% increase in new condo sales year-to-date. A total of 2,341 contracts have been signed, with a median price of $1.4 million. This trend is expected to continue in the coming months, as buyers take advantage of the lower prices. The shortage of resale properties is also likely to contribute to demand for new condos.
Rental Market The average rent in Manhattan increased by 0.50% in the past month, from $4,815 to $4,839. That's a small increase, but it's the fourth month in a row that rents have gone up. Over the past year, the average rent in Manhattan has increased by 1.06%. That's not a huge increase, but it's noticeable.
When you break it down by apartment type, studios have seen the biggest increase in rent. Non-doorman studios have seen their average rent increase by 7.50% in the past year, while doorman studios have seen their average rent increase by 4.95%. On the other hand, non-doorman one bedrooms and two bedrooms have seen a decrease in rent in the past year of roughly 2%.
Luxury Market 18 contracts were signed last week for Manhattan homes priced at $4M or above, the same as the previous week. Condos were more popular than co-ops, with 11 condos selling compared to 4 co-ops. This is good news for the market, as it beat the 10-year average of 16 contracts signed in the same week.
Brooklyn's luxury market had a dismal week, with only 9 homes priced at $2M or above going into contract. This is down from 10 contracts in the previous week. The slowdown is likely due to New Yorkers leaving the city for Labor Day weekend.
De-facto Airbnb Ban Starting last week, New York City hosts listing their properties for short-term stays must register with the city, or face fines of up to $5,000. That rule is meant to help enforce a longstanding prohibition against rentals of fewer than 30 days unless the host is present, and with a maximum of two guests. The change — which Airbnb has called a "de facto ban" — is one of the most significant moves a major city has made in recent years to curtail short-term rentals, coming after New Orleans issued new restrictions of its own in March.