The red-hot market in Manhattan finally showed signs of cooling in April. The number of signed contracts declined month-over-month for the first time since December (-10.7% from March), and inventory levels increased (+5.3% from March). The most obvious reasons for the shift are rising interest rates and an expected seasonal increase in inventory in April (historically, inventory levels are highest April-June). Putting this into perspective, the market is still very strong, but this shift may be the beginning of a trend toward normalization after an unprecedented frenzy in the market.

Closed sale data continued on an upward trajectory, but these figures are a lagging indicator reflecting deals that were negotiated and went into contract 2-3 months ago. Closed sale prices were substantially higher than in March (and up double-digit percentages year-over-year) reflecting the surging market during Q1. Properties spent less time on the market and traded at prices that were very close to ask versus last month and last year. 

In Brooklyn, rising interest rates seem to have had little effect on the market thus far – prices were up again across all metrics, and days on market and negotiability were down. Inventory did rise slightly, but not as much as total signed contracts. The number of condo contracts declined slightly despite an increase in corresponding inventory, but the data is not so significant as to represent a trend in our view. Overall, Brooklyn buyer demand remains high, and the market seems ready to absorb far more than this small increase in inventory.

ne month does not make a trend, April might indicate some stabilization of what has been a fiercely competitive Manhattan market

(WSJ)