Welcome to November!

I hope you had a great Halloween. In this update, I dive deeper into the news and real estate activity in Brooklyn and Manhattan over the past month. Please feel free to reach out with any questions, comments, or real estate needs.

Q3 2023 Brooklyn Co-op/Condo Prices

Sales of Brooklyn apartments in the third quarter remained significantly lower than a year ago. A surge in mortgage rates starting in mid-May helped bring closings down 28% from the third quarter of 2022. While sales have declined sharply over the past year, prices have held steady in most areas. Both the average and median prices for all Brooklyn sales were higher in 3Q23 than a year ago. Condos fared better than co-ops during that time, as their average price rose by 8% while co-ops saw a decline in price.

Open House Activity

In our weekly open house survey for the week of 10/23-10/29, open houses averaged 1.18 attendees; that’s 0.2 points down from last week’s 1.38. Consistent with our recent surveys, factors such as interest rates, lack of significant price drops, world affairs, and weather have led to a sluggish fall selling season. The average price of listings surveyed saw a 30% increase over our prior report’s average price. Additionally, higher priced properties showed the best traffic among all price ranges. Additionally over the past couple of weeks, we’ve seen increased traffic on 3- to 5-bedroom properties, including townhouses and single-family houses. Agent comment of the week: “Renewed interest after price drop.”

NYC Rental Market

The New York City rental market appears to be cooling off, but don’t expect big discounts. According to Jonathan Miller, president, and CEO of appraisal firm Miller Samuel, Manhattan’s median rent was $4,350 in September, representing a 1.1% decline from the previous month. Notable however, it also represented an 8.2% increase on a year-over-year basis. The NYC rental market “is doing what we expect and topping out after two months of record rents,” Miller says. August is usually the prime leasing month, but this year there was a drop in newly signed leases compared to the previous year, continuing a trend toward renewing leases versus signing new ones that picked up in July.

The Economy

Research from two economists at the New York Fed attempts to explain why economic growth in the U.S. has been stronger than in other high-income economies recently. The authors looked at savings rates. While the savings rate in the U.S. has fallen below its pre-pandemic level, in other major economies it remains above the pre-pandemic level. This means that to continue spending, Americans have used their “excess savings” built up during the pandemic, while other countries have not. That’s been good for the U.S. economy, as consumer spending accounts for about 70% of GDP. This has helped our economy recover faster than others, but it does raise some concerns.

Inflation remains well above the Fed’s 2% target, a reminder that even though great progress has been made in bringing down inflation, it’s still too early to declare victory. That means the possibility of more rate hikes is on the horizon.

Stocks rose sharply and 10-year Treasury yields fell to two-week lows following the Fed decision to hold interest rates steady in its current 5.25% to 5.50% range.  Jerome Powell noted that the risks are becoming increasingly balanced. The benchmark 10-year note yields fell to 4.766%, the lowest since Oct. 17. Two-year yields dropped to 4.942%, the lowest since Oct. 10.

Nationally, sales of previously owned homes dropped 2% in September from August to a seasonally adjusted annualized rate of 3.96 million units, according to the National Association of Realtors. Sales were 15.4% lower compared with September 2022. This is the slowest sales pace since October 2010.

Brooklyn and Manhattan Market Activity and Trends

Brooklyn Supply

As of 11/1, Brooklyn had 3,350 active listings, representing a 2.6% increase over the prior month and a 9.8% decline on a year-over-year basis. The seasonal pattern of supply has been fairly consistent prior years, however the overall volume is substantially lower.  In terms of new supply, the Brooklyn market saw 915 new listings during the month of October, a 4.3% increase over the prior month and a 5.2% increase on a year-over-year basis. This past week, there were 178 new listings, down 13% from the week.

The declining weekly supply indicates a trend of further supply contraction as we head toward year-end. While this scenario may benefit sellers due to reduced competition, buyers might find themselves with fewer options and may need to act quickly on properties that fit their criteria.

Brooklyn Demand

Demand in Brooklyn, represented by 30-day pending sales, increased to 526 contract signings, a 26.7% increase over the prior month and a 0.6% decrease year-over-year. The significant increase is likely a bit of an outlier and may result from a REBNY listing system overhaul that may have overstated recent contract signings. Looking at contract signings relative to seasonal patterns would suggest that demand is lukewarm. Over the past week, Brooklyn saw 118 contract signings, a marginal decrease from the previous week, yet slightly better year-over-year.

Brooklyn Market Pulse

Based on the most recent measure of Market Pulse, Brooklyn appears to be in a Buyer’s market.  The Liquid Market Pulse measure below is prepared by the team at UrbanDigs and represents the seasonally adjusted relationship between supply (active inventory) and demand (liquidity pace). A positive value means the current market is outperforming the seasonal average. A negative value means the market is underperforming the seasonal average.

Chart 1

Market Timing

Based on conversations with clients and other market participants, it appears that certain segments of the buyer community are delaying purchases in anticipation of price reductions next year. While that strategy may pay off, it also comes with some risk.  Since current deal prices won’t be evident until sales data is released several months later, visible price declines that may occur early next year would actually reflect contract signings from today. The market early next year could be much different than it is today.  It usually is as new inventory comes to market and demand/competition for homes picks up in anticipation of the spring selling season.  So, future prices may not be an accurate reflection of the opportunity set available to investors at that time.  By waiting, buyers may be missing favorable opportunities that exist today. Additionally, given the prolonged period of declining deal volume, significant price drops are not anticipated by many in the market without a surge in supply.

Manhattan Supply

In Manhattan, as of 11/1, there were 7,344 properties for sale.  Manhattan also appears to be closely tracking a seasonal trend. Supply increased over the prior month, but at a slower rate, indicative of a seasonal peak with potential declining inventory as we finish out the year. In previous years, Manhattan had reached as many as 7,600 listings around this time of year. However, this year seems well off that pace. With respect to new inventory, there were 1,616 new listings for the month, an 18.5% decline from the prior month. Additionally, there were 354 new listings for the week, down 10.5% from the prior week and down 2.2% year-over-year.

Manhattan Demand

On the demand side of things, there were 777 contracts signed in the last 30 days. While the recent increase in contract signings marks a significant step up from the prior period and is slightly higher than the same period in 2020 and 2022, it’s still below the trend. Additionally, during the week, 198 contracts were signed, which is up 6.5% from the prior week. From a seasonal standpoint, we are currently around what is often the peak period for contract signings during the fall.

Manhattan Market Pulse

Given the relationship between supply and demand, the Manhattan market also appears to be favoring Buyers from a negotiating leverage standpoint.

Chart 2

Manhattan Price Cuts

Looking at price action on co-ops and condos, the most significant price cut activity for co-ops has been on the Upper East Side and in Midtown. For condos, the most significant price cuts have been in Midtown and Downtown.

Manhattan Price Trends

Tracking historical resale condo prices per square foot versus the last asking price per square foot (as of the contract signing date), we observe that the two lines in the chart below follow a similar pattern. Since prices lag the market by three to five months, we don’t have visibility on more recent prices.  However, the dip in the last asking price and recent uptick over the last few weeks may indicate an end to the price softening and a potential increase in Manhattan prices as we approach the year-end.

Chart 3


Over the past month, the market has shifted more towards buyers than sellers. Open houses have slowed, average days on the market have increased, more and larger price cuts have occurred, and the ratio of contracts signed to off-market listings has fallen. In short, with fewer new listings, higher rates, and aging inventory in Brooklyn and Manhattan, certain sellers may be under more pressure to sell; this means more opportunities for buyers. However, be careful not to paint the market with a broad brush as negotiating leverage is case-specific. There are still properties that sell quickly and over asking price and newer listings, particularly those aged less than 30 days, tend to be much less negotiable on price. Nonetheless, opportunities are out there for those who keep their eyes open.

Buyers currently on the fence, hoping for price declines early next year, may end up missing the boat as prices typically lag the market by 3 to 5 months. Any price declines that might possibly show up in a few months would actually reflect today’s activity. Moreover, with no end in sight to the pervasive supply shortage, many in the market expect continued upward pressure on prices through next year. To the extent that rates moderate when inflation cools, a surge in demand will likely drive prices higher. Therefore, from a market timing standpoint, waiting comes with its share of risks.

Best of luck out there—it’s a tricky market! If you need help navigating or have questions, please give me a call.

All the best,



Appendix A – Brooklyn

Source: UrbanDigs

Chart 4

Source: UrbanDigs

Appendix B – Manhattan

Chart 5

Source: UrbanDigs