T
he summer of 2023 was a confusing period for new developments, with the luxury market experiencing a decline and both Manhattan and Brooklyn showing no clear trends. This pattern continued into August, where Brooklyn saw a spike in contracts year-over-year while the luxury market in Manhattan struggled. Despite this, the city saw an increase in contracts signed last month, with a total of 246 deals compared to 236 last year. However, the median price per square foot dropped by 11% to $1,550, and days on market decreased by 4% to 119.

    Marketproof's monthly report revealed that the mixed signals in August may provide clarity on how buyers are reacting to falling mortgage rates in the coming months. At the end of August, the average 30-year fixed mortgage rate was 6.35%, the lowest it's been since May 2023. Although demand slightly increased, inventory decreased to 10,532 available units as no new Manhattan projects came online this quarter. In contrast, Brooklyn saw nine boutique projects launch, adding 69 units, while Queens had four projects that added 87 units.

    Jason Thomas, senior vice president of research and analytics at Brown Harris Stevens Development Marketing, noted that development launches in the outer boroughs have a quicker launch cycle than those in Manhattan. In August, Manhattan saw 123 new development contracts signed compared to 116 last year. The median asking price was $2 million, and the median price per square foot was $2,084.52. Fifth Avenue continues to be Manhattan's standout project, signing nine contracts on one- and two-bedroom units. Rabina's 99-unit supertall has sold 61% of its units after netting an additional 21 contracts in July and 27 in June. Thomas explained that the building's reasonable price per square foot and its prestigious Fifth Avenue address have attracted buyers. Non-penthouse units listed on StreetEasy do not crack $3,000 per square foot. Corcoran Sunshine Marketing launched sales for the building in April.

    The luxury market experienced its third consecutive month of declining deals, with 24 contracts signed at $4 million or more, two less than last August. For the third straight month, 50 West 66th Street led the luxury market, signing four more contracts over $4 million in the 121-unit building. Extell Marketing Group, supported by The Corcoran Group and Douglass Elliman, is leading sales for the project.

    Brooklyn's new development market ended with a bang as 98 deals were signed in the borough, a 28% increase compared to last year. Deal volume signed in Brooklyn was the highest since May 2023. The median asking price was $1.3 million, and the median price per square foot was $1,299. Coury Napier, head of research at Serhant, noted that Brooklyn is starting to outpace Manhattan in terms of signing pace. Kensington Manor, a new 76-unit project at 428 East 9th Street, led Brooklyn with 10 contracts on studio and one-bedroom units. Goodman pointed out that entry-level units like those at Kensington Manor, priced between $370,000 and $590,000, have been selling well. Corcoran's Danielov Team launched sales for developer ZHL Group two months ago.

    While Queens saw 24 contracts signed in July, this was nearly half as many as the 43 signed in August last year. The median price was $923,000, and the median price per square foot was $1,196. The Vela, a 29-unit project in Astoria, led the borough with four contracts on one- and two-bed units. Serhant launched sales in November of last year.