Entering August: Mortgage Rates Drop; Limited New-To-Market Supply; Lower Contract Volume in Manhattan; Brooklyn Contract Volume Rebounds

This week, Manhattan and Brooklyn experienced contrasting trends in contract activity. In Manhattan, contract volume decreased by 13% compared to the previous week, making it one of only six non-holiday weeks this year with fewer than 200 contracts signed. 

Conversely, Brooklyn saw a 9% increase in contract volume, rebounding from an unusually low level the previous week. As a result, the Elegran | Forbes Global Properties Consumer Sentiment Index fell from +29 to +14 this week, primarily driven by the decline in Manhattan.

Supply in Manhattan decreased by over 4% this week, with only 172 new listings added to the market — a significant 27% drop compared to the previous week and the lowest weekly total this year on a non-holiday week. In Brooklyn, nearly 5% fewer listings came to market compared to the previous week, but total supply remained relatively stable, declining by only 7 units.

August is typically a slow month for real estate in NYC, characterized by fewer new listings and contracts signed. Given the current volatility in the stock market, renewed recession fears, conflicts in the Middle East, and a looming election, uncertainty abounds. This uncertainty may contribute to a quieter-than-usual August for the real estate market, creating opportunities for buyers searching for a deal.

Additionally, this week’s decrease in mortgage interest rates could bring buyers to the market. The average rate on the popular 30-year fixed mortgage dropped 22 basis points to 6.4% on Friday, according to Mortgage News Daily. This is the lowest level for mortgage interest rates in more than a year. The drop followed a weaker-than-expected monthly employment report, which sent bond yields falling fast. The recent high on the 30-year fixed mortgage was 7.52% in late April.

Manhattan Supply

Entering August, the overall supply in Manhattan continues to decline as anticipated. This week, supply decreased by 4.2%, bringing the total to 6,341 units. Notably, only 172 new listings were added to the market, marking a significant 27% drop compared to the previous week and the lowest weekly total this year on a non-holiday week. Expect new-to-market supply to remain limited this month, with an anticipated increase after Labor Day.

Brooklyn Supply

Unlike Manhattan, Brooklyn’s supply has remained relatively stable in recent weeks. This week, the overall supply saw a minimal decrease of just 7 units, maintaining consistency with the prior week’s levels. A total of 159 new properties came to market, reflecting a modest 5% decline from the previous week.

Manhattan Pending Sales: Pending sales decreased by 1.6% to 2,933 units this week.

Brooklyn Pending Sales: Pending sales decreased by 3.2% to 1,915 units this week.

Manhattan Consumer Sentiment

This week, Manhattan’s score on the Elegran | Forbes Global Properties Manhattan Consumer Sentiment Index dropped from +14 to +2. This decline is attributed to a nearly 13% reduction in signed contracts compared to the previous week, with a total of 181 contracts signed.

Brooklyn Consumer Sentiment

Brooklyn’s residential real estate market rebounded in contract activity this week, recovering from an unusually low previous week. A total of 118 contracts were signed, representing a notable 10% increase from the previous week. Consequently, the Elegran | Forbes Global Properties Brooklyn Consumer Sentiment Index rose from +50 to +63. 

New Development Insights 

Marketproof reported that 47 new development contracts were signed in 37 buildings this week. The following buildings were the top-selling new developments of the week:

• Lucent 33 (LIC) reported 5 contracts

• One Wall Street (Financial District) and Monogram New York (Turtle Bay), each reported 3 contracts

• The James (Clinton Hill) reported 2 contracts.