REAL ESTATE • In Context
Real estate will not miss 2023, with its inflated interest rates, inventory shortages, and geopolitical turmoil. And yet, in New York City at least, the market held up just fine, especially at the highest end.
There were 1198 contracts signed above $4M last year, which ranks fifth over the last decade, per Olshan’s Luxury Market Report 2023. (Number one? 2021, by a longshot, at 1877 contracts. Number 10? 2020, also by a margin, at 645.) North of $10M (the “trophy market”), 240 deals got done, which is the most since 2014 (excluding 2021’s outlandish 400).
The numbers look similar when isolating for new developments. There were 2957 sponsor contracts signed in 2023, 422 of which hit the $4M luxury threshold. That’s down from 2021-22, but in line with the pre-pandemic average, according to Marketproof’s 2023 NYC New Development Report. Of those sponsor deals, 93% were in Manhattan and 7% in Brooklyn. Queens, which had the best new development year of the three, has yet to get on the board in the luxury category.
What’s everyone watching for in 2024? Interest rates, of course, but also inventory. The two are tightly connected on the resale side, but for new developments, the inventory issue is simply dwindling supply. Per Marketproof, new dev inventory shrunk 25% last year in a declining sales environment. And that trend doesn’t show signs of abating, at least in Manhattan. May be time to hop on that 7 train to Long Island City.