2022 NYC Luxury & New Development Analysis

2022 NYC Luxury & New Development Analysis

  • Michael Meier
  • 01/10/23

As we settle into the New Year, here are some notable stats released in the last few weeks to help you get caught up on developments in the NYC real estate market. 

New York City has always been (and will always be!) a unique real estate market that doesn’t follow national trends. So, when looking for insight and data on where the real estate market is going, you need to look at local data and analysis. In this week’s report, let’s sum up 2022 as it related to market activity in the luxury market segment, with regard to new developments before we take a deep dive into general trends in the Manhattan real estate market. 

Luxury Market Segment

The number of contracts signed for luxury properties with values over $4m in 2022 was 1304. What is interesting about this figure is that the last time figures were close to this amount was in 2014 and 2015. Since 2016, the number of contracts declined steadily until a low point of 645 in 2020. Then there was this dramatic jump to 1877 in 2021. Even though 2022 figures showed a marked decline from the previous year, it still compares favorably to pre-pandemic years. 

We see a similar trend in contracts above $10m with steady declines since 2014 and up to 2020, followed by a dramatic leap in 2021, before settling back down to 2015 levels in 2022. 

The last statistic to look at in the luxury market segment is the average price decline before a signed contract, which we also refer to as the discount. In 2022 discounts were down to 5%. The last time we saw 5% was in the years 2013 to 2015. The discount rate has been rising steadily since then, and the fact that we’ve dropped back down to 5% in 2022 is a significant development. 

Market Activity Around New Developments

To sum up the year, new developments activity in 2022 was 20% above the pre-pandemic (2015-2019) average. This represents $8.3B in aggregate sales for projects across the City, compared to the $7.1B average. Of this, deals on new developments in Manhattan represented only 15% of this volume when you look at the spread of deals across the boroughs. Brooklyn had 20% of the deals, and Queens had a whopping 51%. The last thing to mention about new developments in NYC is that two-thirds of market activity took place in the first half of the year with deals slowing down in the second half.

Analysis of General Manhattan Market Trends in 2022

We’re excited to see what happens in 2023 especially given the volatility over the last 3 years. This past year was one of our most similar to the last pre-Covid market in 2019, but despite the similarities, we still saw changes in the number of transactions that took place. 

Supply. We started 2022 with 5736 units on the market and ended the year with 6276. Other than a slight build-up of listings towards the end of the year, which is normal, 2022 looks a lot like 2018 and 2019, without the big rise in 2020 and the sharp decline in 2021. The real story here is that despite the big drop in supply, there wasn’t a drop in prices because of a corresponding drop in demand. 

Pending Sales (Listings in Contract)

We see here that the deal pipeline is declining, and supply is down. The table below shows that at the end of 2021 and the beginning of 2022, there was a surge in deals going through, followed by the sharpest downward decline in 10 years by the end of 2022.

Resale Values

Another interesting statistic is the Manhattan Resale Condo PPSF (Price Per Square Foot) - it isn’t up, it isn’t down, it’s just hovering. From the beginning of 2022 until the end, the range has been between $1438 and $1472, ending the year at $1452. Very unexciting, but again, indicative of both the drop in demand and the drop in supply.

General Market News

I’ll end with some key statistics from 2022 from the Q4 Manhattan Market Report from Compass. Something that jumps out is the correlation between combined condo and co-op sales and new listings for the year. Both were down significantly year-on-year from 2021 – 24.9% and 27.6% respectively. On the buyers’ side, there was sufficient demand to pick up the properties that did come on the market but without frenzied bidding wars. At the same time, sellers seem to generally be adopting a wait-and-see attitude and not putting their properties on the market unnecessarily. Demand and supply are not significantly out of sync with each other, and neither are they high. The real estate market in New York is holding its own in neutral territory!

  • Combined condo and co-op sales were down 24.9% year-over-year and 19.7% quarter-over-quarter.
  • Average and median prices rose 3.2% to $1.97M and fell 3.5% to $1.11M, year-over-year, respectively.
  • The only price bracket to see growth was the $10M-20M range, which jumped 21.9% year-over-year in total sales.
  • The $1M-3M price bracket saw the greatest decline, down 27.6% year-over-year and 25.1% quarter-over-quarter.
  • Ultra-luxury apartments sold for $20M+ were priced 13.3% higher on average than Q4 of last year.
  • Contract activity was down 10.4% compared to last quarter, an improvement over the rest of the year, hinting at a slight boost in sales in the first part of the New Year. 
  • Condos fared the worst this quarter, with contracts signed sinking 53.5% year-over-year and 20.9% quarter-over-quarter, while co-ops fell 37.0% and just 0.7%, respectively.
  • Quarter-over-quarter increases in contract activity were seen for properties entering contract at $3M and above. 
  • The Upper East Side saw an 8.2% increase in contracts compared to last quarter.
  • Inventory was up 5.9% year-over-year, but fell 18.5% quarter- over-quarter.
  • The $1M-3M price range accounted for the most active listings, at 38.1%, and grew 16.0% year-over-year to nearly 2,200 properties on the market.
  • Studio inventory fell to its lowest level since 2019, while 2- bedrooms saw their highest market share.
  • New listings were down 27.6% year-over-year and 23.1% quarter-over-quarter.

Get In Touch With Me!

If you want to talk about how market developments impact the value of your property and your neighborhood, contact me through my website https://meierrealestate.com/ or call me at 917-2094300. 

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