Photo: Robert Clark
The Manhattan and Brooklyn new construction markets were polar opposites in the first quarter of 2018.
While Brooklyn inventory levels soared, Manhattan recorded a quarterly decline for the first time in two years, according to a report released today by New York brokerage Halstead Property Development Marketing (HPDM).
Over the last quarter, new construction inventory in Manhattan fell by 5.2 percent to 6,082 units. This was still up 8.2 percent year-over-year — marking a pause in what has been a two year trend of rising inventory, HPDM says in the report.
And this could be the beginning of a new trend for Manhattan’s inventory.
“I would expect to see new development inventory begin to plateau over the next few quarters, as no large-scale projects are in the pipeline on the near-term horizon. While absorption has slowed, so have new launches,” Matthew Petrallia, vice president of research and analytics at HPDM, tells BuzzBuzzNews.
The average price for a Manhattan new construction condo fell 4.7 percent from last year to $2,513 per square foot.
Some 38 percent of all active Manhattan new construction listings were priced above $5M, well below a high of 52 percent recorded in the first quarter of 2015.
Just over 280 units in Manhattan entered into contract in the first quarter, which was down nearly 20 percent from the same time last year.
Manhattan’s Upper West Side submarket recorded the largest quarterly price gains of any Manhattan neighborhood, rising 16.2 percent to $2,770 per square foot — primarily due to contracts signed at 250 West 81st, Waterline Square, and 101 West 78th, says HPDM.
And Manhattan’s Downtown submarket continued to see the most new construction activity with more than 240 units either entering into contract or closing in the first quarter.
Meantime, Brooklyn new construction inventory increased 100 percent annually, due almost entirely to the addition of 458 new units at Brooklyn Point in Downtown Brooklyn.
“I would expect to see a steady decrease in inventory near-term as the new supply is absorbed but within the next three years we do expect a handful of larger scale projects to launch,” Petrallia tells BuzzBuzzNews.
Pricing remained flat from last year for Brooklyn new construction condos at an average of $1,475 per square foot.
About 60 Brooklyn units entered into contract in the first quarter, down 56.5 percent year-over-year. This decline in part reflects a lack of large projects launching in key neighborhoods in recent quarters, inhibiting supply in key price points below $2 million, according to HPDM.
Absorption rates in both boroughs slowed in the first quarter compared to last year reflecting buyer uncertainty about how the newly passed Tax Cuts and Jobs Act might impact their purchase.
“Buyers hit pause to educate themselves on the impact of the tax code changes on their real estate decisions,” Stephen Kliegerman, president of HPDM, says in the digital release.
However, on a quarter-over-quarter basis, absorption ticked upward when compared to the slower than average fourth quarter in 2017.
Click here to read the entire release.