T
he New York City new development market wrapped up the quarter with a relatively subdued tone. Following a lackluster spring, closed sales declined by nearly 13% year-over-year, while contract signings increased by almost 8%, according to Marketproof's third-quarter data. The number of contracts signed this past quarter fell just short of the same period in 2019, with Manhattan reporting 389 contracts and Brooklyn 231.

    Industry experts argue that a quiet quarter was necessary for the market to normalize after the pandemic-induced volatility. Jason Thomas, senior vice president at Brown Harris Stevens Development Marketing, notes that demand has settled back to pre-pandemic levels, despite interest rates being two to three times higher than before 2020. Robin Schneiderman, managing director of BHSDM, adds that people seem more optimistic about making real estate purchases following recent rate cuts.

    The luxury sector was the standout performer in Manhattan, with units asking over $10 million seeing a 39% increase in contracts signed and those between $7-10 million experiencing a 10% rise. Midtown East accounted for nearly 30% of contract signings in Manhattan, driven by the success of 520 Fifth Avenue, which has sold nearly 70% of its units since starting sales in April.

    In September, Manhattan saw 141 contract signings, up from 92 last year, with a median sale price of $2.6 million and a median price per square foot of $2,177. The average asking price on active listings fell by over 2% in Manhattan, while Brooklyn's asking prices per square foot rose to an all-time high of $1,383. Industry experts suggest that the narrowed spread between Manhattan and Brooklyn pricing may explain Manhattan's outperformance this quarter, but also signal opportunities for developers to reinvest in Brooklyn.