The Real Deal New York

Brooklyn home prices set record — but lag Manhattan by $1M

Report shows cost gap is shrinking, however

January 15, 2015 09:42AM
By E.B. Solomont

Average sales prices in Manhattan and Brooklyn (Credit: Miller Samuel)

Average sales prices in Manhattan and Brooklyn (Credit: Miller Samuel)

Brooklyn’s average home sales price reached a record high in 2014 — and did so for the third year in a row — but still, it was nearly $1 million less than the average sales price in Manhattan.

In Brooklyn, the average sales price for a home last year was $739,610, up 9.7 percent from $674,272 in 2013, according to Douglas Elliman’s quarterly sales report, which was published today. The median sales price in 2014 was also a record $570,220, up 3.7 percent from $550,000 a year earlier.

The fact that Brooklyn prices have hit new highs each year for the past three speaks volumes about its status as a competitor to Manhattan and its emergence as “much more of a standalone market,” said Jonathan Miller, president of appraisal firm Miller Samuel and the author of the Elliman report. He pointed out that Brooklyn is the city’s only borough in which prices have exceeded pre-financial crisis highs.

Still, the price difference between Brooklyn and Manhattan widened at the end of the year.

During the fourth quarter, Brooklyn’s median sales price rose 2.6 percent from the prior year, to $585,000. That’s $395,000 less than Manhattan’s median sales price of $980,000 for the fourth quarter, which rose 14.6 percent from $855,000 a year earlier.

Meanwhile, Brooklyn’s average sales price during the fourth quarter rose 9.9 percent to $756,569. But that number is nearly $1 million lower than Manhattan’s average sales price of $1.74 million during the fourth quarter.

“The very fact that the average is so much wider tells you what’s happening in Manhattan,” said Miller. “There’s a tremendous amount of space at the top of the market; the envelope is being pushed further away from the bulk of the market.”

But broadly speaking, the price gap between Manhattan and Brooklyn has narrowed, thanks to Brooklyn’s rapidly rising prices.

Median sales prices in Manhattan and Brooklyn (Credit: Miller Samuel)

Median sales prices in Manhattan and Brooklyn (Credit: Miller Samuel)

According to the Elliman report, the median luxury sales price in Brooklyn jumped 6.4 percent to $1.84 million during the fourth quarter. This week, Ideal Properties Group said luxury townhouse sales priced at $3 million and up rose 579 percent in the borough over the last five years.

The Corcoran Group, in a report also released Thursday, said the largest price gains occurred further into the borough as buyers searched for available inventory. “It’s not like people just started to buy in Bed-Stuy,” said Frank Percesepe, Corcoran’s senior regional vice president, Brooklyn. “But this year was amazing…  The prices catapulted.”

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