While buyers have the upper hand in most parts of New York City, the market for townhouses in Brooklyn stands as an exception.
Soaring demand for single-family homes in the borough has caused inventory to shrink and prices to shoot up, mirroring the national housing market, where a severe lack of units for sale is driving record price increases.
The number of townhouses for sale in Brooklyn is down 42 percent from a year ago, while sales volume has shot up almost 42 percent in the same period and prices have jumped nearly 11 percent, according to a market report by Serhant.
“It’s definitely been a crazy year for Brooklyn townhouses,” said Garrett Derderian, the report’s author.
Agents working with prospective buyers are facing intense competition when it comes to making offers and getting a deal done, while would-be sellers find themselves caught in a paradox: They can sell their homes at a premium, but if they want to stay in Brooklyn, there aren’t many options available.
“The conversations are just insane,” said Leslie J. Garfield’s Ravi Kantha. “The competition for turnkey houses is higher than it’s ever been.”
Kantha started hearing from buyers and their agents weeks ago about getting in to see his listings the week after Labor Day.
Jessica Taylor, a Serhant agent, was working with a buyer who put in an offer that was $500,000 above-ask for a townhouse in Prospect Heights. The property had been on the market for one day. Still, her clients failed to close when the sellers backed out of the deal, despite the higher price, because they didn’t know where they would go.
“Sellers aren’t prepared for how quickly things are selling,” she said. “As soon as anything that’s renovated hits the market, they get inundated with showing requests and offers come in pretty much straight away.”
Lindsay Barton Barrett at Douglas Elliman listed a townhouse in Carroll Gardens for $6.5 million this summer and had a deal after three showings — plus four backup buyers who offered to step up if anything changed.
“To have five ready, willing and able buyers at $6.5 million or $2,000 per square foot in Carroll Gardens in the middle of July is not something you would have experienced in the past,” she said.
According to Serhant’s report, neighborhoods in Northwest Brooklyn — including most of the priciest areas such as Brooklyn Heights, Dumbo, Cobble Hill and Carroll Gardens — saw the number of active townhouse listings drop 61 percent, from 462 homes a year ago to 182.
The number of sales in Northwest Brooklyn jumped 83 percent year-over-year, with 366 transactions closed so far in 2021, compared to 200 in the same period last year. The median closed sales price is up 15.5 percent to almost $2.7 million, from $2.3 million a year ago.
Based on the area’s current pace of sales, which is the most rapid in the borough, the 182 townhouses currently on the market can be sold in 3.3 months.
Homes in East Brooklyn — which includes the neighborhoods of BedStuy, Crown Heights and Prospect Lefferts Gardens — are the second most in-demand, with 4.4 months’ worth of inventory. Prices in the area surged 7.5 percent year-over-year to $900,000, while sales jumped almost 25 percent to 752 trades to date, from 603 a year ago.
The enclaves that have seen the most sales so far this year include Bed-Stuy, where 213 townhouses have sold, and Park Slope, where 135 have traded. And the neighborhood with the tightest supply is Prospect Park South, where existing inventory will be sold off within 1.3 months based on the current sales pace.
But just because Brooklyn’s townhouse market is in step with national trends doesn’t diminish the rule of New York City’s exceptionalism when it comes to ever-present demand for real estate, according to Kantha.
He says Brooklyn is just catching up to Manhattan in terms of pricing and appreciation. Earlier this year, billionaire Vincent Viola and his wife, Theresa, sold their Brooklyn Heights mansion for $25.5 million, setting a new record for the borough’s townhouse market.
“New York City will always be New York City,” Kantha said. “And Brooklyn just happens to be experiencing a level of interest that is driving the market in a way that I don’t think it’s ever seen.”