Buyer demand for homes in Brooklyn and Queens continues to exceed supply, pushing prices in the boroughs to record highs.
The median sales price in Brooklyn hit $750,000 in the fourth quarter of 2016, which is an all-time record, according to Douglas Elliman’s latest quarterly report. That figure represents a jump of 15.4 percent year-over-year.
Inventory is also continuing to fall in the borough, dropping 31 percent year-over-year to a record low of 2,232. Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report, said that while sellers in Manhattan are only just now understanding the facts of the market, it’s a very different story in Brooklyn. Sellers there are more realistic, he said, but the lack of inventory suggests many may be holding off listing their properties while prices continue to rise.
“The sentiment is that there’s a lot of upside left,” he said of sellers in the borough. “The brand is changing in Brooklyn.”
Overall, the average sales price in the borough increased 17.3 percent to $947,333. The number of sales jumped 22.3 percent to 2,582. The median price of a Brooklyn condominium was $895,000 in the fourth quarter, compared to $727,500 in the same period of 2015. For co-ops, the median price in the borough was $385,00, a year-over-year rise of 6.9 percent from $360,000. For new development, the median price hit $1.1 million.
A separate report from the Corcoran Group found new development inventory in the region rose 96 percent year-over-year in the quarter.
“Under $2 million, we’re short on inventory. Under $500,000 we are very, very short,” said Frank Percesepe, Corcoran’s executive vice president of Brooklyn. “There’s a large group of people that would enter the market if there were property appropriately priced for them.”
It was a similar story in Queens during the fourth quarter, where prices jumped and inventory fell. The median sales price rose 6 percent year-over-year to $498,000. The average sales price, meanwhile, hit a record $573,455, a 9.8 percent increase from 2015.
Meanwhile, the luxury median sales price increased 14 percent year-over-year to reach $1.2 million.
Miller said demand from Brooklyn is spilling over into Queens.
“I don’t know why that wouldn’t continue, at least in the short and mid-term,” Miller said. “It’s a combination of proximity to Brooklyn and lower price points.”