Sales of new condominiums in July evoked the Tom Petty classic “Free Falling” — and it’s developers who are home with broken hearts.
New development contract activity plummeted 30 percent last month, dipping below pre-pandemic levels for the first time all year. Developers reported 188 deals across the city, 37 percent fewer than in July 2019, according to a report by Marketproof.
“There was one day in July where the contract numbers were so low that I was like, ‘Guys, let’s double check those,'” said Marketproof CEO Kael Goodman.
The market is split between haves and have-a-lots, as wealthier, less rate-sensitive buyers continued scooping up the most expensive condos, while most others stepped back. Nearly 20 percent of contracts last month were for homes asking more than $4 million, raising the median sale to $1.7 million, a six percent increase from July.
Although mortgage rates have slid back towards 5 percent, a volatile stock market, fears of a recession, ongoing inflation and supply chain woes are all weighing heavily on condo sales.
Manhattan developers reported 99 contracts worth $327.6 million, down about 40 percent from June. Ultra-luxe developments performed better than the rest of the pack, though, bringing the borough’s median price per square foot to $2,154, up 11 percent from the same period in 2019.
JDS Development’s 111 West 57th Street notched what was likely the month’s priciest sale. A penthouse at the Billionaires’ Row skyscraper went into contract asking $21 million. It was also a hot July for OKO Group’s Aman New York, which snagged the second and third-most expensive contracts. Extell’s One Manhattan Square led the borough in overall activity with six contracts.
Meanwhile, Brooklyn recorded its worst month since June 2020, when the city was in the midst of an exodus. Developers there posted just 66 contracts, down 50 percent from pre-pandemic levels. Total dollar volume fell to $97.6 million.
The Narrows, Sapol Construction’s 40-unit project in Fort Hamilton near the Verrazzano-Narrows Bridge, reported eight contracts, a city high. The project’s sales are led by SERHANT’s Team Fernandez, which recently jumped ship from Compass.
As usual, Queens sales were anchored by just a handful of high-profile developments, like Risland US’ Skyline Tower. While sales volume in the borough is up 50 percent from pre-pandemic levels, it fell nearly 40 percent month over month.