It’s time to take a look at the NYC real estate market update for Q1 2023. 

To view the full reports, visit the links below: 

Corcoran NYC Real Estate Market Update Q1 2023 – Manhattan 

Corcoran NYC Real Estate Market Update Q1 2023 – Brooklyn 

The Breakdown

The market continued its downward shift in the first quarter of 2023. But it’s important to keep things in perspective to get a true sense of what’s happening. 

Q1 2022 was a record breaking quarter. So it’s not surprising that closed sales in Manhattan would be down dramatically this year (to the tune of 38% to be precise). And signed contracts were likewise down significantly (34%). 

But despite headwinds, it’s not all bad news. 

Inventory was up by 3% compared to Q1 2022, but it’s still at its lowest level since 2017. And this is likely insulating prices a bit. The median price was down to $1.020 million (a 15% annual decline), but this drop was largely due in part to buyers shifting their budgets downward. Sales under $1 million comprised 50% of sales, their highest share in 3 years. The average price per square foot, meanwhile, was actually up 6% year over year, due to a number of high end sales in prime areas. 

Brooklyn also saw a huge tumble year over year for closed sales, with transactions down a whopping 46% compared to Q1 2022. 

But again – the comparison period was record breaking. So it’s not really that shocking when viewed in that context. In fact, the total number of closings for Q1 2023 was on track with the historical first quarter average for 2010 to 2020. 

And in a bit of a surprise, contracts signed were up 5% in Brooklyn, indicating that the borough might have a bit more resilience in terms of sales demand compared to Manhattan. 

Like Manhattan, more buyers shifted to lower priced homes in Brooklyn, which resulted in a lower median sales price of $729,000. And the average price per square foot also saw a modest annual decline, to the tune of 2%. 

The inventory situation in Brooklyn remains much tighter than in Manhattan, however. While listings were up 3% compared to the previous quarter, they were down 12% on an annual basis. This was the sixth consecutive month that listings declined, and this is the second lowest number of available listings since 2014 (not including the beginning of the pandemic). 

The Takeaway

Everyone’s got their eyes on interest rates. A steady month-long decline may encourage more buyers to get into the market. But it’s unclear what inventory will actually be there to greet them if and when they do. Would-be sellers are still hanging on to much lower rates, and they still don’t have a lot of incentive to sell. But if they start getting wind of bidding wars on properties, some might be tempted to list. 

Buyers in Manhattan – now’s definitely the time to poke around the market and see what’s available. Sellers are eager to get deals done and will be negotiable. But folks will still need to be reasonable about pricing. You’re not going to get a deep discount on something that’s appropriately priced! 

Brooklyn buyers, I’m sorry to report that you likely have less bargaining power compared to Manhattan buyers. Yes, prices are down, which is great news because that compensates for higher interest rates. But there’s not much in terms of options compared to past market slowdowns. So don’t assume you’re in the driver’s seat. If something great comes on the market, you’ll need to be prepared to compete for it. 

Thinking about buying but not sure if you’re ready? Then sign up for my First Time Buyer Bootcamp to help you figure it out! Join here!

Thinking about listing your home for sale but not sure where to start? Then check out my NYC First Time Seller Guide. You can get it here. 

And if you’re ready to buy or sell, you can set up a call to discuss with me right here – Schedule a Call