No sleep till Brooklyn: sales prices, volume shatter records in second quarter
Queens prices and sales rise as well, though inventory is less constrained
The Brooklyn sales market is again shattering records (and with them hipsters’ hearts), reports released today by leading residential brokerages show. Both median and average sales prices for homes in the borough hit record highs in the second quarter, per Douglas Elliman’s report.
“The Brooklyn sales market is very heated,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report, which has been tracking the borough’s sales since 2003. According to his numbers, the median price for a Kings County home was $550,000, up 15 percent year-over-year.
“The pace of the market is also brisk,” Miller said. “The negotiation between buyer and seller is virtually nonexistent.”
The reasons for the upswing are all the usual suspects: tight credit keeps sellers from selling, which in turns helps historically low inventory yield higher prices. Partly the lingering effects of the credit crunch, the amount of housing available in Brooklyn is tiny – and in the second quarter hit the lowest level since Elliman began tracking the metric in 2005.
The total number of abodes available in Brooklyn in the second quarter was an estimated 4,704, Elliman’s data show.
“It’s very difficult to handle open houses,” in Brooklyn at the moment, said Frank Percesepe, senior vice president at the Corcoran Group. “Prices shot through the roof. It’s a surprise, even to me.”
Second quarter numbers from Corcoran underscore the lack of inventory, especially for new developments, where the number of sales plummeted 34 percent in the quarter, to 277 from 421 the prior year. Resales, on the other hand, were up 20 percent, to 705 from 586 year-over-year, per Corcoran. The average price for new developments rose 10 percent, to $834,000 from $756,000 year-over-year, setting a record for post-recession price per square foot, which now rests at $762 on average, according to Corcoran.
Percesepe pointed to 20 Henry Street, Love Lane Mews, at 9 College Place (both in Brooklyn Heights), and the Park Union, at 910 Union Street in Park Slope, as new developments commanding high prices.
And while the always-higher prices are precipitating growth in the resale market, those buyers are not trading up because of credit constraints, Percesepe said. Sellers may be retiring and leaving the area, or moving into the rental market.
“I like to say housing is local and credit is national,” Miller said.
In Queens, home sales in the second quarter were up 8.7 percent — as inventory is slightly less constrained – to 4,870 from 4,482 transactions in the same period of 2012, Elliman’s data show. Median price was up 9.9 percent, to $390,000 from $355,000 year-over-year.
“When compared with Brooklyn, Queens’ [market] is just now starting to improve,” Miller said. The market is about “a year and half behind,” he added. Hipsters might take notice, as Long Island City’s flourishing market has a number of luxury buildings in the works, which are starting to feel like the region’s only doorman option.
As Manhattan rents remain high, “Brooklyn is often the next consideration,” Miller said. “But this go-round, Brooklyn has become a destination location, instead of a search for affordability.”