Despite Softening Brooklyn Market, Contracts Show Strength

BROOKLYN, N.Y., July 12, 2018 /PRNewswire/ -- Stribling & Associates, a leading New York residential brokerage and pioneer in the Brooklyn luxury market, today releases the second quarter Brooklyn Market Report. The report is the only to cover inventory, contracts and sales across the entire borough. It revealed a yearly decline in the total number of closings, but a slight uptick in contract activity, as the number of properties listed surged to near-record levels.

"We saw a six percent decline in the total number of sales in the second quarter," said Garrett Derderian, Director of Data & Reporting at Stribling. "The slowdown was a result of fewer contracts signed earlier in the year, as buyers took a pause as the new tax policy was implemented. We also saw global instability and swings in the stock market, all of which affect buying patterns."

According to the report, condo and co-op units both recorded average and median price declines. Condos saw their average and median prices both fall 4% to $1,082,894 and $850,000, respectively. Co-ops recorded an average price drop of 9% to $558,480, and median decline of 4% to $430,000. A bright spot was the townhouse market, which Derderian described as "consistently strong" in the sub-$4 million market. Here, the average price grew by 5% to $1,077,339 and median price jumped 6% to $850,000, mirroring that of condos. However, townhomes saw the greatest discounts, averaging 8%.

Derderian pointed to contract activity of a better gauge of current market conditions: "We are seeing buyers take more time when looking to purchase, resulting in an increase in the time a property stays on the market," Derderian stated. Indeed, the average days on market increased from 82 in 2Q17 to 90 in 2Q18. Mr. Derderian continued, "Despite the longer time to enter contract, contract prices increased across all four submarkets. We see this as a positive sign that buyers still see great value in properties across the borough and are willing to pay a premium in the markets that are in close proximity to Manhattan."

Undeniably, the tony submarket of Northwest Brooklyn, which includes neighborhoods such as Brooklyn Heights, Cobble Hill, and Park Slope, remained the most expensive market for recorded sales, contracts signed, and active inventory. "There is a real sense of community within the neighborhoods in Northwest Brooklyn that is not replicated anywhere else in the city. You still have the mom and pop shops, along with the waterfront and Prospect Park. Most of these areas are also near Manhattan, making them feel a world away, when it can be as little as a 10-minute train ride, if not less."

A bevy of new construction projects and demand throughout the borough continued to push the number of properties listed and prices higher. "The second quarter of 2018 saw the highest 2Q-level of listed properties since 2015. This was also the first time where we saw the average asking prices in all four submarkets exceed $1 million," Derderian highlighted. "There was tremendous growth in Northwest, East, and South Brooklyn as new condo projects and an increased demand for home purchases pushed asking prices to record levels." Notably, the North Brooklyn median and average asking prices were both down 0.1%, which Derderian observed as "unsurprisingly flat, as many buyers take a pause" while sellers wait out the short-term implications of the impending L-train shutdown.

The report also noted second quarter inventory priced below $500K was at its lowest 2Q-level-to-date, at 14%. Meanwhile, listings priced between $1-2M and $2-3M each recorded their highest inventory share-to-date, at 32% and 10%, respectively.   

In a final statement, Derderian advised, "The market has certainly shifted in favor of the buyer in many parts of the borough, and city as a whole. Still, prices in Brooklyn are more attainable than across the river [in Manhattan], and the outer submarkets continued to see strong growth. Brooklyn is a borough that has come in to its own, as a first-choice option, and the evolution we are witnessing it a reflection of that."

Highlights from Stribling & Associates 2Q Brooklyn Market Report:

• Median sales price was $775,000, down 2% year-over-year
• Average sales price was $966,828, down 3% year-over-year
• Average price per square foot was $839, down 7% year-over-year
• Average days on market was 90, up from 82 one year ago
• There are 7.3 months of supply, up from 6.9 one year ago

Recorded Sales:

• There were 2,375 recorded sales to date, down 6% from one year ago
• Condo units saw an average PPSF of $1,075
• Condos and Townhouses/houses had the highest median price, both at $850,000
• Co-op units had a median price of $430,000
• Properties sold between $500K-1M made up 45% of all closings
• 9% of closings were priced above $2M
• Northwest Brooklyn has the highest median and average prices, at $1,165,500 and $1,555,417, respectively
• The greatest discounts were in South Brooklyn, averaging 5%
• The smallest discounts were in Northwest Brooklyn, averaging 2%

Contracts Signed:

• There were 1,922 contracts signed, 1% more than one year ago
• Condos made up 41% of all contracts
• Condos recorded the highest average PPSF at $1,091
• Townhouses/houses has the highest median price at $1,200,000
• Units priced above $3M saw the median price increase of 3% and average drop of 9%
• Northwest Brooklyn saw the greatest price improvements, with the median up 30% and average up 11%
• The strongest PPSF increase was in South Brooklyn, up 2% to $573
• Northwest Brooklyn recorded the most contracts, with 38%
• North Brooklyn recorded the least contracts, with 12%

Inventory:

• There were 4,159 active units in the borough, a 19% increase year-over-year
• Condos made up 32% of inventory
• Condo units had the highest average PPSF at $1,029
• Co-op units were the most affordable, with an average PPSF of $600
• This was the lowest level of inventory priced below $500K, at 14%
• 37% of inventory was priced between $500K-1M
• First 2Q where inventory priced between $2-3M took double-digit share, at 10%
• All submarkets had average asking prices above $1 million
• North Brooklyn was the only submarket to record median and average price declines, both down 0.1%
• Northwest Brooklyn saw the greatest median price increase, up 16% to $1,550,000
• East Brooklyn saw the greatest average price increase, up 17% to $1,272,945

About Stribling & Associates

Stribling & Associates, Ltd. is a premier residential real estate firm with over 300 agents throughout five locations in Manhattan, Brooklyn, and Long Island City. As one of the most renowned brokerages in New York, Stribling uses its respected expertise in the current market to provide individualized services to both buyer and sellers. Stribling agents specialize in the sale of luxury townhouses and cooperative and condominium apartments. The company's philosophy is based on professional, personalized services coupled with exceptional knowledge of key residential market trends. Stribling Private Brokerage specializes in the discreet marketing of properties over $5 million and commands a prominent market share in that sector of Manhattan residential real estate. Through strategic partnerships with Miami's Cervera and international estate services firm Savills, Stribling's global reach extends to more than 700 offices worldwide.

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SOURCE Stribling & Associates