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Brooklyn home prices hit record highs

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Manhattan’s sky-high market is spilling over into the outer boroughs

Flickr/Tectonic Photo

We’re barely two weeks into 2017, but there are already a plethora of market reports coming out to offer some depressing news about real estate in New York. Namely: it’s more expensive to buy in Brooklyn than ever before. According to the Douglas Elliman report, the median sales price hit $750,000—15.4 percent higher than last year and a new high for the borough.

“We’ve seen median sales set a new high four times in the last two years,” says Jonathan Miller, who prepared the report. Overall, he says, there’s “lots going on” in the Brooklyn market these days, including rising prices, falling inventory, and more sales in general.

Miller found record price indicators across property types and regions. The median price for a condo is $895,000, 23 percent higher than last year, while the median for a co-op is $385,000, 6.9 percent higher than a year ago. One- to three-family properties have a median of $830,000, 9.3 percent up from a year ago.

It was also the fastest-paced market, with the number of sales jumping 22.3 percent to 2,582, while listing inventory fell 31 percent to 2,232—a record low. Brooklyn, Miller says, is benefiting greatly from spillover caused by sky-high Manhattan prices.

Even the median for Brooklyn’s luxury market— $2,446,900, a 28.8 percent increase from last year—hits a “sweet spot” some buyers are willing to pay. “The overall median price in Manhattan is still $300,000 higher,” Miller says. And because pricing is more in sync with buyer’s appetites, “listing discount is straddling zero.”

Halstead also released its fourth quarter Brooklyn report, finding that the average apartment reached a record high of $834,944, while average townhouse prices hit a new high of $1,046,951 and an average $468 per square foot. (That’s a 16 percent increase from the same time last year.)

550 Vanderbilt Before After Max Touhey
COOKFOX’s 550 Vanderbilt, one of many high-end new developments in Brooklyn
Max Touhey for Curbed

Diane M. Ramirez, CEO of Halstead, contributed the strong numbers to “high-end new development [which] accounted for 31 percent of Brooklyn apartment closings, and that we are now seeing a $1.2 million average price tag on new developments, a price which is 46 percent higher than last year.” Additionally, there’s low inventory, leading to more competition—and higher prices.

The Corcoran report, also focused on Brooklyn, found a persistent lack of inventory at the lower end of the market, while new development inventory rose a dramatic 96 percent in the fourth quarter of 2016. The new development sector had the highest sale prices for the quarter at $1.54 million, a 45 percent increase from a year ago.

Now on to Queens, which was covered in the Elliman report. The quarterly average sales price ($573,455) set a new record, and the median ($498,000) reached its second highest level. Like Brooklyn, this quarter brought lightning fast market conditions—with 3,917 sales, it was Queens’ fastest market pace since 2005, when Miller began tracking numbers. A co-op median of $250,000 set a record, as did the $650,000 median for one- to three-family townhouses. The condo median price was $520,000, 8.7 percent higher than last year. The median for the luxury market jumped 13.6 percent to $1.25 million.

If Brooklyn and Queens have gotten too outrageously expensive for you, Miller has just begun to track sales in Riverdale. “It’s an outlier,” Miller says. “From an affordability standpoint the area is very interesting, considering its proximity to Manhattan.” Up north, the median sales price is $280,500, a 7.5 percent increase from last year.

The co-op median is $245,000, the condo median is $490,000 and one-three family property median is $835,000. Miller picked up on rising prices and sliding inventory, as well as a quickening market. The likely cause? An increase in interest from priced-out Brooklyn, Queens and Manhattan residents—of course.