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Why Brooklyn and Queens buyers are “camping out”
Buyers are still looking at properties online but “a lot of appointments aren’t being made” says Elliman’s Steven James
“When the sales market dips, the rental market is up,” said Steven James, president and CEO of New York City for Douglas Elliman, summing up the firm’s most recent reports for Brooklyn and Queens.
The two outer boroughs saw dropping sales prices and rising inventory, in line with similar trends in Manhattan. On the other hand, the number of new leases being signed in both Brooklyn and Queens was up, suggesting that potential buyers are staying put in the rental market for now.
“The buyer is still waiting for better deals,” said James.
Sales volume continued to drop in Brooklyn, falling year over year for the fifth consecutive quarter. Meanwhile, listing inventory jumped 56.8 percent to 3,203.
Sales prices, which had been hitting record-highs since the end of 2017, slipped slightly. Median sales price in Brooklyn was down 3.8 percent to $765,000. But for luxury properties the median sales price rose by 3.1 percent to $2.5 million.
“The market in 2018 peaked out,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the Douglas Elliman report, “If that wasn’t the peak, it’s unlikely we’re going to go much above that in the near future.”
In sharp contrast to a sluggish sales market, the pace of Brooklyn rentals was sharply up. The number of new leases surged by 40.3 percent, while median rental price rose 5.5 percent to $2,900.
“Landlords and tenants are more out of sync now in terms of what they think rental value is,” said Miller, speculating on the cause of the surge in new rentals, “Landlords are being more aggressive at the time of renewal and tenants are trying their luck elsewhere.”
In Queens, the same patterns were visible on a smaller scale, Miller said. “This quarter was the second time in three years that no average price record was set,” he said of the borough, “That’s not sustainable.”
The number of sales declined in Queens year over year for the fifth consecutive quarter, with the largest decline in the condo market. Meanwhile, listing inventory rose for the eight consecutive quarter.
The median sales price in Queens stayed completely flat at $550,000. For luxury properties, the median sales price hit a record high, increasing 2.3 percent to $1,336,057.
“Queens had a dearth of supply and as prices rose and records were set, it pulled more inventory into the market. But record pricing created affordability challenges which contributed to the slowdown in sales,” Miller said, “The spillover from Brooklyn is what has pushed Queens over the edge.”
As in Brooklyn, the rental market in northwest Queens is up, with new leases up 26.3 percent at 327, and concessions dropping year-over-year for the first time in seven months. The median rental price was up 1.8 percent at $2,800.