February 2022 Market Update
Low inventory was the defining feature in real estate markets across the country last month, including in both Manhattan and Brooklyn.
In Manhattan, overall inventory levels were 20.2% lower than in February of last year, and the minimal (2.3%) increase from January was a much smaller uptick than we would expect this time of year. Due to the low inventory, average days on market has continued to decline (down 5% versus last month and almost 14% compared to last February), and prices are still on the rise – the average price per square foot for February sales was up 23.3% compared to the same time last year. While there were fewer signed contracts than in February of last year, the ratio of signed contracts to available inventory was higher, similar to what we saw in January. Not surprisingly, negotiability also continued to decline (down to 4% last month) indicating that new inventory is being absorbed more quickly – and at prices much closer to asking – in the current market.
Looking more closely at Manhattan’s sub-markets, we have noticed an uptick in demand for condos recently. Even in prime downtown areas where condos are scarce, and buyers used to be more open to coops as a result, many more buyers are not insisting on condos. With more buyers living/commuting between multiple residences, there seems to perhaps be more importance placed on the flexibility that condos offer, such as ease of subletting, pied-a-terre use, etc. Contracts signed for condos were up by almost 20% last month compared to January, while condo inventory rose less than 2% during the same period. By contrast, there were only 5% more coop contracts signed, despite a 2.7% increase in available inventory. This isn’t to say the coop market has struggled – in fact the average price per square foot for coops rose last month in every size category (studios to 4+ beds). The condo market was in decline well before Covid, and overall was harder hit during the peak of the pandemic, so it will be interesting to see if this dynamic shifts and Manhattan condos once again regain a stronger footing in the market.
In Brooklyn, inventory remained at an all-time low last month with essentially zero uptick compared to January – highly unusual given the expected seasonality of the market. Given the low supply, bidding wars dominated. It is not unusual for larger properties (2+ bed) in popular neighborhoods, and especially those with low monthlies and outdoor space, to command a dozen or more bids with several all-cash buyers in the mix.
The most explosive growth in Brooklyn prices last month was in the townhouse market. With extremely low inventory, townhouse prices rose by double digits last month compared to both January 2022 AND February of 2021, and average days on market was down 10% versus January and a whopping 25% compared to February 2021. We saw this first-hand with our buyers in certain neighborhoods. Lower-priced, appealing 1-2 unit townhouses (e.g. under $3.5M million in BoCoCa, Park Slope, Fort Greene, etc. and below $2.5M in Windsor Terrace, South Slope, Bed-Stuy, etc.) were snatched up briskly and at prices far exceeding their asking. By contrast, prices for February coop and condo closings remained fairly in-line with both January 2022 and Feb 2021, and only the largest (3-4 bedroom) coop and condo homes that closed last month saw a significant year-over-year increase in average price per square foot.