Call it the pandemic paradox: Brooklyn home sales plunged in the second quarter, yet the median price went up.
An analysis by The Real Deal of Brooklyn single-family and multifamily property sales shows that overall deals were down almost 52 percent year-over-year.
In raw numbers, 680 homes were sold in the quarter compared to 1,410 in the same period last year. Luxury deals were hit the hardest.
Normally such a massive drop in demand would trigger a price collapse, but that did not happen because some sellers pulled listings, reducing supply, and others did not slash prices, hoping the market would bounce back. The average price per square foot fell less than 1 percent, to $507.
Moreover, Brooklyn’s median home sale price went up 5.6 percent in the quarter to $950,000, TRD’s analysis showed. That’s because almost 60 percent of homes sold in the second quarter were in the $750,000-$2 million price range, versus under 51 percent last year.
At the same time, the average sale price dropped about 6 percent, to $1.124 million from $1.195 million, mostly because the percentage of sales above $3 million fell from 6 percent of all deals to just 2.5 percent, so there were relatively fewer luxury deals to bloat the average.
Broken down by neighborhood, the analysis shows that some areas were hit particularly hard by the pandemic. Clinton Hill saw a 73 percent year-over-year decline in deals last quarter, while in Bed-Stuy the drop was roughly 55 percent. In East New York, deals fell 65 percent to a total of 40 — down from 115 the year before.
There were some outliers: Prospect Heights and Madison saw slight upticks in sales. However, in both cases the gains amounted to only a handful of homes.
Pricing patterns also fluctuated, particularly as buyers opted for smaller homes. In Williamsburg, Clinton Hill, Bushwick and Prospect Heights, for example, the average size of properties that sold in the second quarter fell between 8 percent and 17 percent from the previous year.
The increase in median price was seen across the entire Brooklyn market last quarter — reaching a record high, according to a separate report from Douglas Elliman.
“What’s been happening in the market on a pricing basis is that the market has continued to flirt with records, no matter what the conditions,” said Jonathan Miller of appraisal firm Miller Samuel.
The second quarter was highly unusual in more ways than one. After the state shut down, wealthy buyers fled the city and brokers were banned from conducting in-person showings, a critical part of their business.
Compass broker Eric Sidman, who lives in Williamsburg and leads the Brooklyn division of the Hudson Advisory Team, said a lot of his work in that period involved fielding calls from buyers and sellers. “Everyone had questions about the market and we really didn’t know where anything was going to be at that time,” he said.
Since the state began reopening and showings resumed, the borough has seen a surge of activity. Just last week, new contracts above $2 million hit levels not seen since early March. Given the natural lag in contract data, the figures suggest the revival started several weeks before.
Sidman has also seen a shift in buyer appetite. A lot of shoppers are looking for townhouses or two- or three-bedroom properties with outdoor space, he said.
“I’m seeing a lot of buyers coming over from Tribeca and looking in Brooklyn Heights or other prime Brooklyn neighborhoods,” he said. “There’s a definite drive toward these smaller, more private properties right now.”
Although a lot of buyers are angling for hefty price cuts, and sellers are becoming more realistic about asking prices, Sidman said he was not seeing the major discounts many anticipated.
“There’s still only limited supply in Brooklyn,” he said. “If you want a townhouse, there’s only so many of them.”
Write to Sylvia Varnham O’Regan at [email protected]