New development sales withered in the July heat, falling below pre-pandemic levels for the second straight month.
While July typically sees less contract activity than its preceding months, last month also fell short in comparison to prior years and pre-pandemic averages. The 217 contract signings was a nearly 14 percent decrease from last year, and a 9 percent drop from the 2015 to 2019 July average, according to Marketproof’s monthly report.
Total deal volume last month was $570 million, with a price per square foot of $1,746. Contrast this with last July’s numbers, with a deal volume at $613 million with a median price per square foot of $1,682.
Jason Thomas, senior vice president of research and analytics at Brown Harris Stevens Development Marketing, said the initial readings should not be cause for concern, noting that contract signings update over the course of the year and a difference as small as 10 or 15 percent can be wiped away by delayed reporting.
“I don’t think it’s particularly soft at all,” Thomas said of the new development market. “I think it’s going to be, in the end, totally stable.”
Unlike the last few months, which saw Manhattan keeping pace with pre-pandemic trends, this month the borough fell below 2019 levels for the first time since March, with 120 contracts signed for a total dollar volume of $428 million.
Marketproof CEO Kael Goodman echoed Thomas’ read of the market, and pointed to several projects putting up impressive contract numbers.
520 Fifth Avenue, a 99-unit supertall by Rabina, inked 21 one- and two-bedroom contracts in July, adding those deals to the 27 contracts it signed in June.
“Twenty-one contracts in a single month is a standout result for any project,” Goodman said.
Since Corcoran Sunshine Marketing launched sales three months ago, 52 percent of the units have been sold.
The luxury market has also slowed down, falling to 26 contracts — 25 in Manhattan – signed last month, down from 37 contracts last July and below the pre-pandemic average of 30 contracts. The signings added up to a deal volume of $242M, down 14.5 percent from last year.
50 West 66th Street led the luxury market for the second straight month, signing three contracts over $4 million. Extell Marketing Group, with the support of The Corcoran Group and Douglass Elliman, is leading sales for the project.
Elliman’s Janice Chang attributed the steady sales to the project filling a need around the Lincoln Square neighborhood, where developments of this scale have not gone up since 15 Central Park West in 2006. Chang said the building is expected to open in phases, with the base opening this December and the tower opening next spring.
Last month also saw the priciest closing of the year with a condo at 730 Fifth Avenue going for $135 million. The buyer was later revealed to be the developer of the project, OKO Group’s Vlad Doronin, despite earlier reports indicating the buyer was an Asian investor.
Brooklyn is also in a summer slump, with 68 deals signed, a 30.6 percent drop off from last July and below the borough’s pre-pandemic average. Unlike Manhattan, Brooklyn did improve on its June performance, growing its contract signings by three percent and its total dollar volume, with $118 million, by 11 percent.
Bergen Brooklyn, at 323 Bergen Street, led the borough with nine deals, the first sales reported since Avdoo & Partners launched the project three months ago. Brooklyn Point, at 393 Graham Avenue, came in second with three signed contracts. The 482-unit tower has sold 85 percent of its units since sales began in 2019. Extell Marketing Group and SERHANT. are jointly managing marketing and sales.
The top contract in Brooklyn went to a penthouse in Quay Tower, the one luxury contract signing of the month in the borough. Unit 1C, a three bedroom, went for just under $8 million at its last asking price.
Meanwhile, Queens more than doubled its pre-pandemic average of development volume, with 23 contract signings for $24 million in total volume.
Lucent 33, a 64-unit building in LIC, led the borough with 10 contracts ranging from $767,000 to just under $1.2 million. Since sales began nine months ago, 64 percent of the apartments have sold. Nest Seekers is overseeing marketing and sales.
Queens’ outlier performance comes as the borough has seen an unrivaled explosion in inventory, with more than 56,000 homes completed between January 2010 and June 2022. The borough has been on a tear since last year, when it more than doubled its pre-pandemic numbers in the first seven months of 2023.
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