Brooklyn Breakthrough: Outer Markets Drive Growth in Q3
Borough set new price records, driven by interest in emerging markets
BROOKLYN, N.Y., Oct. 11, 2018 /PRNewswire/ -- Stribling & Associates, a leading New York residential brokerage, today releases the third quarter Brooklyn market report. The report is the only to cover inventory, contracts and sales across the entire borough. It showcased a significant drop in the number of sales and new contracts, but an increase in borough-wide prices, driven by rising interest in outer markets.
"The overall trend in Brooklyn mirrored that of Manhattan in the third quarter," said Garrett Derderian, Director of Data & Reporting at Stribling. "There was an 11% drop in the number of sales, an 18% drop in the number of contracts signed, and a 20% increase in the number of active listings. Still, the borough logged median and average price records, primarily driven by the East Brooklyn submarket."
According to the report, condos were the only property type to record discounts: the median sale price was down 3% to $850,000 and the average sale price-per-foot dropped 4% to $1,069. Still, condos remained the most expensive property type. Derderian cited price declines in the North Brooklyn submarket as the underlying cause of the decreases.
"North Brooklyn, largely encompassing Williamsburg, is in an adjustment period," Derderian stated. "We see this as a direct result of the impending L-train shutdown, scheduled for early next year. Simply put, there are sellers who are exiting the market to avoid inconvenience and are willing to part with their properties at a relative discount. However, we also see buyers taking advantage of the price dip, believed to be temporary, and purchasing."
The price shift in North Brooklyn is more evident for contracts signed during the quarter, as the submarket was the only area to record declines across all price metrics. Its median price declined 9% to $1,025,000 and its average fell 4% to $1,248,407. Meanwhile, the report noted that East Brooklyn, which includes the neighborhoods of Bedford-Stuyvesant and Crown Heights, saw the sharpest price increases of any submarket. The average contract price increased 18% to $1,134,773. Likewise, the average sale price jumped 17% to $963,095 while its median sale price increased 9% to $775,000.
"The borough-wide price increases in the third quarter are a direct result of the outer markets appreciating in value. These neighborhoods, primarily made up of townhomes, offer a rich history and true sense of community, while still being relatively affordable. The tree-lined streets and local shops offer a different lifestyle than that of a new condo development on the water or across the river in Manhattan. These areas are now a first-choice option for many buyers and investors looking to capitalize on the growing interest."
Northwest Brooklyn, one of the most expensive markets in New York City, also showed significant price appreciation. "If you look at the sales figures, and pipeline of upcoming developments, we expect Northwest Brooklyn to further appreciate in value. In fact, the submarket is the only one in Brooklyn with a median price topping $1 million, fueled by high priced transactions," Derderian advised. The median sale price increased 14% to $1,259,000 while its average increased 10% to $1,611,703 with upcoming developments in Cobble Hill and Downtown Brooklyn contributing to future growth.
The top five sales in the borough were all in Brooklyn Heights, a tony neighborhood in the Northwest Brooklyn submarket. "If you look at the top sales, three were above $10 million, compared to only two in the third quarter of last year. This is a similar trend to Manhattan, were the number of super-prime sales has been increasing, despite a softening market overall," Derderian observed.
Out of the top five sales, three were townhomes, including the most expensive deal of the quarter at 218 Columbia Heights, which sold for $12,000,000. Interestingly, Derderian pointed out the sale was a whisper listing, meaning the property was never publicly marketed. The two other deals were in the new development condo at 167 Columbia Heights.
Still, Derderian pointed to concern surrounding the supply of active listings. "The number of properties available is reaching peak levels not seen for several years. Unfortunately, the forthcoming supply is arriving as the time a property takes to sell is increasing." The report stated the average days a property was on the market in the third quarter increased to 108, up from 101 last year. "As construction continues for many large-scale developments, the margin between supply and demand will tighten. The question then becomes are the current price levels sustainable."
The report revealed third quarter inventory priced below $500K totaled 14%, its lowest Q3-level-to-date. Inventory priced $2 million or above reached its largest share to date, with 17% of all active listings. "There is no question the number of properties at the upper end of the market is going to continue to increase its overall share." Derderian acknowledged. "With many condo developments under construction, there is a growing amount of inventory that will need to be absorbed. If the sales pace slows, expect to see downward price adjustments in upcoming quarters."
Highlights from Stribling & Associates 3Q Brooklyn Market Report:
- Median sales price was $800,000, up 2% year-over-year
- Average sales price was $1,043,440, up 7% year-over-year
- Average price per square foot was $826, down 6% year-over-year
- Average days on market was 108, up from 101 one year ago
- There are 8.5 months of supply, up from 7.6 one year ago
Recorded Sales:
- There were 2,176 recorded sales to date, down 11% from one year ago
- Condo units saw an average PPSF of $1,069
- Townhouses/houses had the highest median price, at $900,000
- Co-op units had a median price of $485,000
- Properties sold between $500K-1M made up 45% of all closings
- 9% of closings were priced above $2M
- Northwest Brooklyn has the highest median and average prices, at $1,259,000 and $1,611,703, respectively
- The smallest discounts were in Northwest Brooklyn, averaging 2%
Contracts Signed:
- There were 1,397 contracts signed, down 18% from one year ago
- Condos made up 41% of all contracts
- Condos recorded the highest average PPSF at $1,055
- Townhouses/houses has the highest median price at $1,350,000
- Units priced above $3M saw the median price increase of 1% and average increase of 3%
- East Brooklyn saw the greatest price improvements, with the median up 6% and average up 18%
- All submarkets recorded average price-per-foot declines
- South Brooklyn recorded the most contracts, with 39%
- North Brooklyn recorded the least contracts, with 12%
Inventory:
- There were 4,702 active units in the borough, a 20% increase year-over-year
- Condos made up 35% of inventory
- Condo units had the highest average PPSF at $1,046
- Co-op units were the most affordable, with an average PPSF of $633
- This was the lowest level of inventory priced below $500K, at 14%
- 37% of inventory was priced between $500K-1M
- First 3Q where inventory priced between $2-3M took double-digit share, at 10%
- All submarkets had average asking prices above $1 million
- North Brooklyn was the only submarket to record a price-per-foot decline, down 3%
- Northwest Brooklyn saw the greatest median price increase, up 8% to $1,495,000
- East Brooklyn saw the greatest average price-per-foot increase, up 11% to $696
About Stribling & Associates
Stribling & Associates, Ltd. is a premier residential real estate firm with over 300 agents throughout five locations across Manhattan, Brooklyn, and Long Island City. As one of the most renowned brokerages in New York, Stribling uses its respected expertise in the current market to provide individualized services to both buyer and sellers. Stribling agents specialize in the sale of luxury townhouses and cooperative and condominium apartments. The company's philosophy is based on professional, personalized services coupled with exceptional knowledge of key residential market trends. Stribling Private Brokerage specializes in the discreet marketing of properties over $5 millionand commands a prominent market share in that sector of Manhattan residential real estate. Through strategic partnerships with Miami's Cervera and international estate services firm Savills, Stribling's global reach extends to more than 700 offices worldwide.
Press Contact:
Ashley Murphy, Director of Public Relations
[email protected]
646-675-5068
SOURCE Stribling & Associates
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