Sentiment Disappoints Understandably Amidst Current World Crisis

Week of 10/16

This week, the tragic events in Israel and Gaza have understandably shifted focus and resources. On Friday, many real estate brokerages and law offices opted to stay closed, resulting in a shorter workweek and reporting period. The ongoing conflict has justifiably commanded global attention and has had an impact on our initial projections for an upturn in consumer sentiment.

The Elegran | Forbes Global Properties NYC Consumer Sentiment Index has been adjusted for seasonality and indicator lag to reveal the current consumer sentiment amid the evolving circumstances. This week, it shows that New York City's attitude towards residential real estate now stands at parity with the pre-pandemic benchmark, registering a value of 0. This underscores the market's resilience and its ability to resist significant devaluation.

In this report, we continue to observe the striking contrast between Manhattan's consumer sentiment score of -21, reflecting caution, and Brooklyn's resolute +54, showcasing positivity. These divergent scores illustrate the dynamic nature of the city's real estate landscape, shaped by various factors.

As we dive into the charts, it’s important to remember how external factors intertwine with the city's real estate markets — Especially as the world's attention gravitates towards global events.

Manhattan Supply

In Manhattan this week, we observed a characteristic trend in the supply of residential units. As anticipated, supply hit its lowest point in early September and has since been on a rapid ascent, with expectations of peaking in the coming weeks.

The significance of supply counts often varies across different real estate markets. In many national markets, a limited supply can drive up prices significantly as demand outstrips availability, but in New York City there is a substantial surplus of available units compared to the demand. This week, Manhattan's supply-demand ratio stands at 7,226 units to 151 units, emphasizing the pronounced gap between supply and demand in the city's real estate landscape.

Brooklyn Supply

In Brooklyn, supply trends have followed a familiar bi-annual pattern, with the supply hitting a recent low of 2,995 units over a month ago and increasing. This week, Brooklyn's supply grew to 3,308 units. In the current market, the supply surpasses demand, with 3,308 units available compared to 119 units in demand, indicating a well-balanced real estate landscape. These trends are consistent with historical patterns, showcasing Brooklyn's resilience and unique supply dynamics compared to Manhattan.

Manhattan Pending Sales

Shifting our focus to Manhattan's pending sales, recent data indicates a noteworthy trend. After peaking at 3,356 units in July, the metric experienced a gradual decline, registering figures of 2,600, 2,610, and 2,605 over the past three weeks. This suggests that pending sales are currently at or near their expected low point for October. However, this downward trajectory is expected to reverse soon, with pending sales anticipated to rise towards the year's second but smaller peak, expected in late November or early December. 

Brooklyn Pending Sales

In Brooklyn, pending sales recent data reveals a consistent pattern. Following a peak of 2,213 units in July, pending sales steadily decreased to 1,856, 1,854, and 1,879 units over the past three weeks. This suggests that pending sales have likely reached their anticipated low point for October. However, this decline is expected to reverse course in the coming weeks, as pending sales are projected to rise towards the year's second peak, typically occurring in late November or early December. 

Manhattan Consumer Sentiment

The Elegran | Forbes Global Properties Manhattan Consumer Sentiment Index, which has been in the red for seven consecutive weeks, experienced a decrease from -10 to -21, signaling a continued cautious outlook. This sentiment index serves as a vital measure of Manhattan's attitude toward residential real estate.

The fluctuating scores throughout the year underscore the mixed emotions prevalent among consumers. In the current week, 151 contracts were signed, a slight decrease from the previous week's 171, indicating the nuanced sentiments that continue to shape Manhattan's real estate landscape. 

Brooklyn Consumer Sentiment

Shifting our focus to Brooklyn's consumer sentiment, the Elegran | Forbes Global Properties Brooklyn Consumer Sentiment Index exhibited a positive trend this week. Consumer sentiment in Brooklyn rose from +38 to +54, indicating a robust and optimistic outlook. This metric, which is 54% greater than its pre-pandemic average, has consistently remained strong since July 2020, almost without exception.

In the current week, 119 contracts were signed, showcasing a healthy level of activity compared to 107 contracts in the previous week. These findings underline Brooklyn's resilience and the enduring positivity that characterizes its real estate landscape, reflecting the borough's attractive prospects for both buyers and sellers.

New Development Insights 

Marketproof reported that 36 new development contracts were signed in 28 buildings this week.  The following buildings were the top-selling new developments of the week:

• THE LEXI (Kips Bay) 
• 110 NORTH FIRST (Williamsburg) 

Each reported 3 contracts.

If you would like to chat about the most recent market activity, feel free to contact us at info@elegran.com or connect with one of our Advisors.

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