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NYC’s new development activity shifts back to Manhattan as rates rise

Manhattan-aerial-looking north

New York City’s new development market reported 397 sponsor contracts in April 2022, showing a 14% drop in overall volume from March that was more pronounced in the outer boroughs. Manhattan had a slight 3% dip while Brooklyn and Queens saw 26% and 24% fewer transactions respectively, suggesting the city’s center of gravity is shifting back toward Manhattan. Despite the decrease, contract volume is still 45% higher city-wide than the same period in 2019, before the pandemic.

The overall aggregate dollar volume dropped 7% from March to April 2022, while the median price per square foot and median unit price were essentially unchanged for the second month in a row, indicating that price growth is continuing to level off across the city as activity follows suit.

On the heels of significant changes to the lending climate, New York City is leading into the spring housing market on a trajectory that appears to be headed for “normalcy.” Deal flow is tempering from last year’s boiling point, price growth is stabilizing and long-term appreciation appears healthy – even sustainable. When comparing April 2019 to 2022, we see 7% growth in median price per square foot and 12% growth in median unit price occurring over the course of several years while markets like Miami are seeing that happen in just a year.

“Historically low mortgage rates correlated to a burst of activity in the outer boroughs through the pandemic and now that rates are rising, we’re starting to see Brooklyn and Queens calm down as Manhattan holds steady. With rates set to rise again soon, we could see further decline in contract activity, but that doesn’t mean New York is even coming close to cooling given how far we’ve soared above pre-pandemic levels.”


MANHATTAN

Manhattan new developments reported 226 contracts in April totaling $786.7M, compared with 232 contracts in March totaling $787M. The median price per square foot held steady month over month, while the median unit price was down 6%.

This was another month for big ticket transactions in the borough, with the fervor for trophy units now also hitting projects that have been on the market through several cycles. 53W53, which launched sales in 2016, signed a $17.5M contract in April, and The Woolworth Tower Residences reported a deal on Pavilion A, which was relisted late last year for $23.4M after a $10M price reduction and three years on the market.

MANHATTAN TOP 3S

Top Contracts

Top Closings

  • 111 West 57th Street unit 48 sold for $27,911,178 (representing a 9% discount)
  • Central Park Tower unit 47C sold for $15,315,000 (representing a 7% discount) developed by Extell Development Company and SMI USA, designed by Adrian Smith + Gordon Gill Architecture with interiors by Rottet Studio
  • The Benson unit 16 sold for $14.994,000 (representing a 13% price increase) developed by Naftali Group, designed by Peter Pennoyer Architects and Gga Architects

BROOKLYN

Brooklyn new developments reported 145 sponsor contracts totaling $227.7M in April, marking a 26% drop in activity from March and a nearly 25% decrease in aggregate dollar volume. The median price also declined but not as drastically, with a 2% change and 7% change respectively.

Once again, Fortis Property Group’s Olympia Dumbo – designed by Hillwest Architects with interiors by Workstead – accounted for all three of the month’s top contracts. Quay Tower nabbed the fourth slot with a contract on a 19th-floor, three-bedroom unit last asking $4.325M.

BROOKLYN TOP 3S

Top Contracts

Top Closings

  • 58 Saint Marks Place unit 1205 sold for $5,000,000, developed by Avdoo & Partners Development, designed by Issac & Stern Architects and INC Architecture & Design
  • One Clinton unit 35B sold for $4,650,000 (representing a 2% discount), developed by Hudson Companies, designed by Marvel Architects with interiors by Studio DB
  • 5 River Park unit 8B sold for $4,373,914 (representing an 8% increase), developed by Fortis Property Group, designed by Romines Architecture

QUEENS

Queens saw 26 new development contracts in April, a 24% decrease from March’s 34 reported deals. The aggregate dollar volume decreased in line with contract levels, down 26% at $28.3M, while median pricing declined 7% for price per square foot and 12% for unit price.

It was another active month for the borough’s largest condominium development, Skyline Tower, which inked several new contracts and also marked two top three closings.

QUEENS TOP 3S

Top Contracts

  • The Rowan PHA last asking $2,175,000, developed by RockFarmer Properties and designed by DXA Studio
  • Skyline Tower unit 5710 last asking $1,861,112, developed by Risland U.S. Holdings, United Construction & Development and FSA Capital, and designed by Hillwest Architects with interiors by Whitehall Interiors
  • Skyline Tower unit 4809 last asking $1,663,000

Top Closings

  • Skyline Tower unit 2312 sold for $1,341,600 as part of a bulk sale with unit 2311, which sold for $1,901,640
  • Tangram House South PH2D sold for $3,099,800, developed by F&T Group and Shanghai Construction Group, designed by Margulies Hoelzli Architecture and JG Neukomm Architecture

Report Methodology

  • Report is based on reported contracts and may not represent all contracts signed
  • Prices are based on the last asking price before a unit was put into contract
  • New development contracts are sponsor stage (sponsor controlled) projects that are eligible to sell units
  • Data as of 5/1/2022

Lead photo by Florian Wehde on Unsplash 

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