The residential real estate market in New York City is showing signs of recovery. Home contract signings in Manhattan and Brooklyn rose sharply in February, but they remain far below 2022 levels. Residential sales in the city plummeted in 2022 due to soaring inflation, rising interest rates and supply shortages. Across the city, closed sales in February were down by 34.3% compared to the same month in 2022.
Manhattan and Brooklyn
Monthly home contract signings in February rose by 51% to 677 in Manhattan and by 59% to 337 in Brooklyn. However, residential real estate listings across the city were down by 15.8% compared to 2022 figures, and the number of pending sales was 8.1% lower. A 73% increase in listings suggests that the inventory shortage in Manhattan is easing, but listings in Brooklyn fell by a further 7%.
Co-op and condo sales
Co-op and condo closings were lower in both Manhattan and Brooklyn in February. Co-op closings fell by 38% in Manhattan and 22% in Brooklyn, and condo closings were down by 37.5% and 52% in the two boroughs. There were declines in almost every co-op price category in Manhattan, but sales of units priced at $1 million or above increased in Brooklyn. According to National Association of Realtors projections, the New York City market will strengthen in late 2023 when interest rates are expected to be lowered.
Difficult times
The next few quarters will be very difficult for the New York City residential real estate market. Closings rose in Manhattan and Brooklyn in February, but high interest rates and inventory shortages are still throttling the market. Despite the increases in Manhattan and Brooklyn, the number of closings across the city dropped to a level last seen almost a decade ago. If interest rates are lowered later in the year, the situation should improve significantly.