A 'maddening' Brooklyn market: Slower sales don’t put a dent in prices
- First quarter sales in Brooklyn were down 39 percent year over year
- Median sales price in Brooklyn was $950,000, the third highest in history
- Sales in Queens fell 16 percent and the median sales price was $650,000
Even with limited inventory, 18.5 percent of the sales in Brooklyn went above asking in the first quarter.
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Apartment buyers in Brooklyn aren't seeing a drop in the sales price even as the number of listings on the market continues to fall and deals decline. The number of sales fell sharply to 2,236 in the first quarter of the year, down 39 percent compared to the same period last year, according to the latest edition of The Elliman Report.
The median sales price for apartments in Brooklyn in the first quarter was $950,000, a nominal 0.2 percent increase over the same period last year, but the third highest in history.
It’s worth remembering the first quarter of last year was a buying frenzy with sales activity in Brooklyn at its highest in 16 years—the buying environment is very different this year largely because of higher mortgage rates.
Jonathan Miller, president and CEO of appraisal firm Miller Samuel and author of the report says, “In some ways, sales have overcorrected because sales are 11.4 below the first quarter of 2020, which shows the impact of the doubling of mortgage rates.”
Stubbornly high sales prices in Brooklyn
If you’re looking for an indication of how much prices have risen in Brooklyn recently, the median sale price of $950,000 is 18.2 percent higher than it was before the pandemic began in March 2020.
What’s so “maddening” for buyers, Miller says, is you'd think with slower sales there would be a lot more inventory, which would lower prices. “You are not seeing that because mortgage rates during the pandemic were too low for too long and would-be sellers are wedded to their rate and are sitting still,” he says.
The number of apartments available in Brooklyn during the first quarter fell for the fourth consecutive quarter to 2,645, a 9.2 percent drop compared to the same period last year.
The first quarter market report for Brooklyn from Brown Harris Stevens puts the declines in inventory and sales down to “the unprecedented run-up in sales after the city reopened” rather than a lack of buyer interest. Indeed, data from BOND New York sees an uptick in pending sales, with the first quarter report noting “the market is primed for a solid selling season as we head into the spring.”
Even with limited inventory, bidding wars are still taking place. In the first quarter, 18.5 percent of the sales in Brooklyn went above asking. This is down from 22.8 percent in the same quarter last year.
“We are certainly not seeing records, but almost one in five sales closed above the last asking price,” Miller says.
For buyers paying over the asking price, the average premium was 5.4 percent.
Sales in Queens and the Bronx mirror Brooklyn
The sales patterns in Queens during the first quarter were similar to those in Brooklyn. There was a 16 percent drop in sales to a level just below the first quarter decade average. Listing inventory also fell by 3.5 percent year over year and was consistent with the first quarter average for the decade.
However, the median sales price of $650,000, was down 9.5 percent compared to the same period last year.
In Riverdale, which includes Fieldston, Hudson Hill, North Riverdale, and Spuyten Duyvil, the median sales price increased year over year by 4.5 percent to $345,000—the fourth increase in five quarters.
Sales in the region fell annually for the third consecutive quarter, constrained by the drop in listing inventory for four straight quarters.
Sales of new development condos slow in Brooklyn
PropQuery’s first quarter Brooklyn sales report noted there were 203 new development sales, down annually 37.0 percent. The Elliman Reports puts the decline even steeper at 55.6 percent year over year.
The median price for new development condos in Brooklyn was $835,000, which is down 11.3 percent from a year ago—although up 22.3 percent from pre-pandemic.
“The sales boom of new development in Brooklyn during the pandemic has cooled so we are seeing price trends slip and sales drop but they are both well above pre-pandemic levels,” Miller says.
The first quarter market report for sales in Brooklyn from Corcoran identified how both median price per square foot and average price per square foot decreased annually and quarterly as sales shifted away from new developments.
“Buyers continue to look for value with the majority of deals closing under $750,000, drawing the median price down to its lowest point in 10 quarters," says Michael Sorrentino, general sales manager at Corcoran New York.
According to the first quarter Brooklyn new development report from SERHANT, Northwest Brooklyn accounted for 32.9 percent of the sales activity. The report notes new development apartments in the north of the borough had the greatest increases in price, with the median price climbing 15 percent year over year.
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