Home prices in Brooklyn have held steady in the second quarter, but the market is characterized by a steep decline in inventory and a notable uptick in the sales prices of brownstone properties, second quarter market reports from leading brokerages show.
“Pricing didn’t do a whole lot,” in the second quarter in Brooklyn, said Jonathan Miller, president of real estate analytics firm Miller Samuel and author of Prudential Douglas Elliman’s market report. The more compelling statistic, Miller said, is the 18 percent decline in inventory in the borough year-over-year, which is “firming up the market by stabilizing prices.” Inventory has also declined in Queens, and to some extent in Manhattan, Miller said, but the precipitous drop in Brooklyn is a result of the market peaking earlier there, and the recession hitting harder.
“Buyers are waiting until the market improves,” Miller said, often because they are constrained by ever-tightening lending requirements. And those who sell their homes may not be approved for the loans needed to trade up, Miller said.
The Elliman report, which tracks co-op, condominium and one- to three-family homes in Brooklyn, showed the median sales price in the borough was $586,000, up 2 percent year-over-year. The median sales price for Brooklyn brownstones, however, was $1.3 million — up 9.5 percent year-over-year, according to Elliman’s numbers.
“The standout is the brownstone market, a small niche, with only 3 percent of the Brooklyn market [share],” Miller said. “But it is the highest-priced housing stock.”
Brown Harris Stevens’ report for the borough showed an increase of 13 percent in median prices, to $890,000, in the Brooklyn Heights, Carroll Gardens and Cobble Hill neighborhoods, where many brownstones are located. But despite its reputation as an up-and-coming area, prices in Clinton Hill/Fort Greene dropped year-over-year to $470,000, from $490,000. Prices also fell in the Bay Ridge/Sunset Park area, to $275,000, from $284,000 year-over-year, according to BHS.
Borough-wide, Corcoran’s numbers showed that apartment sales volume was at its second highest point since the market’s collapse, with sales up 16 percent in Brooklyn from last quarter. Corcoran’s report showed an average price-per-square foot of $622 in Brooklyn, up 10 percent year-over-year, and bolstered by a 14 percent uptick in new development sales.
But Miller cautioned that the rise in activity and pricing could simply be seasonal.
“That’s a normal and healthy ebb and flow, moving into the second quarter,” Miller said, noting that inventory will likely continue to tighten for another year. “That’s going to either stabilize or firm up pricing,” he said, adding that apartments are seeing bidding wars, but only up to list price, not above.
“The story is that it’s not a story,” right now, he said of Brooklyn’s slow but steady recovery from the crash. “[The market] is tight but not irrational.”