Brooklyn apartment prices hit 11-year high

Queens homes are cheaper than in 2012, despite booming sales

The Corcoran Group’s fourth-quarter sales report
The Corcoran Group’s fourth-quarter sales report

Brooklyn home prices continued their skyward trajectory in the fourth quarter of 2013, hitting an 11-year record high as inventory continued to lag behind demand. The borough’s median home sale price saw an 11.2 percent uptick to $570,110 from $512,500 in the same period last year, according to the latest Douglas Elliman market report, released today.

The combination of booming demand and dwindling inventory pushed the borough’s absorption rate (which measures how long it would take to sell off all available homes) down to 5.8 percent from 9.7 percent – the second-fastest pace in more than five years, according to Miller Samuel CEO Jonathan Miller, who authored the report.

“This is the only borough where median prices have exceeded the pre-Lehman crash market peak, and we also saw, like we’re seeing in other boroughs but more severe, a drop in inventory,” Miller said. “You’re getting to the point, like in Manhattan, where inventory doesn’t have much room left to fall.”

Sales in the fourth quarter were actually expected to shrink from last year’s numbers, as fiscal cliff fears at the time led to a rush to close as many deals as possible at the higher end of the market, Miller said. But “we actually saw sales even higher,” he said.

A total of 1,752 sales took place in Brooklyn in the fourth quarter, a 21.2 percent uptick from 1,445 in the same period last year. Inventory hovered at 3,385 for the quarter, a 27.7 percent slide from 4,685 in the last quarter of 2012.

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The Corcoran Group’s Frank Percesepe, discussing the brokerage’s own fourth-quarter sales report, told The Real Deal that rising prices borough-wide were driven by that increasingly tight inventory.

“It’s not like we had neighborhoods where inventory didn’t move,” Percesepe said. “There is a direct correlation between inventory and what people are willing to pay. When inventory is low, a lot of buyers out there … they will spend a little bit more.”

In Williamsburg and Greenpoint, the median sale price for condominiums lifted 24.8 percent to $849,000 from $680,000 in the fourth quarter, compared to the same period last year. Fort Greene, Clinton Hill and Prospect Heights collectively saw condo prices jump 38 percent to $689,000 from $499,000, according to the Corcoran report. And in Bedford-Stuyvesant, Crown Heights, Lefferts Gardens and Bushwick, median condo prices jumped 19 percent year-over-year to $450,000 from $378,000.

“There was an amazing amount of activity in Bed-Stuy over 2013, and in Greenpoint a surge of inventory, so we were able to boost the sales there,” Percesepe said. “But there really hasn’t been a disappointing neighborhood.”

The Queens market, meanwhile, saw falling prices but a hefty uptick in the number of sales. The median sale price in the borough fell 4.4 percent to $372,700 from $390,000, according to the Elliman report. Sales activity boomed, however, with a 74.7 percent surge in the number of transactions, to 3,344 from 1,914. Queens inventory, as with Brooklyn, dropped to 5,248 single-family listings from 8,683 in the same period in 2012. The absorption rate also plummeted, falling 65.4 percent to 4.7 from 13.6 year-over-year.

“I describe Queens as maintaining stability,” Miller said, “meaning we had a year-over-year decline in the median sale price, but last quarter we had a rise. It’s been bumping up and down every quarter.”