D
eals are surging in Manhattan's new development market, with contract activity accelerating at a faster pace than resales this fall. According to UrbanDigs data, sales in the sector started climbing in August as mortgage rates began to fall ahead of the Federal Reserve's rate cuts. This momentum continued through September and October, with signed contracts rising 74 percent year-over-year for new developments compared to just 19 percent for resales.

    The resale market caught up in November, but new development sales still logged gains, with inked deals up 33 percent. Susan de França, president of Douglas Elliman's new development marketing arm, expects contract activity to remain high through the end of the year due to a sense of confidence in the New York market.

    John Walkup, co-founder of UrbanDigs, attributes the acceleration to changes in the macroeconomic environment, price reductions, and a shrinking new development pipeline. Kelly Mack, president of Corcoran Sunshine, notes that more buyers entered the market after mortgage rates started easing earlier this year, which elevated sales across the board.

    Developers with lingering inventory dropped their asking prices this fall, with roughly 80 percent of new development deals over the last two months being at buildings that had reduced prices. A slate of new buildings coming to market is also driving demand, with one-third of signed contracts in October and 44 percent in November being at buildings that launched sales this year.

    A dwindling new development pipeline is creating a sense of urgency to buy the new product coming to market, with about 1370 units slated to come to market this year, 35 percent below the decade average. Buyers aware of the upcoming drought are feeling pressure to buy now while options are still on the table.