Brooklyn and Queens have never been this expensive
The third quarter market reports are in, and the data shows high, record-setting numbers when it comes to sales prices in Brooklyn and Queens—and a bit of relief for renters in Manhattan.
Douglas Elliman’s reports this quarter covered sales in Brooklyn and Queens, as well as Manhattan, Brooklyn and Queens rentals. Starting off with sales, “it was basically all about records in 3Q,” says data whiz Jonathan Miller. Get ready for this: in Brooklyn—a borough now in its fourth consecutive year of rising prices—condo prices set new records; co-op prices set new records; one to three family home prices set new records; and finally luxury prices set new records. Compared to last year, the overall median sales price increased 8.7 percent to $735,000 (a record) and average sales price increased 14.8 percent to $983,511 (also a record). The median sales price for luxury properties surged 23.5 percent to $2.5 million—yup, another record.
The average sales price for a Brooklyn condo is now $1.145 million, a whopping 24 percent higher than last year, and the median price is $812,008, a 6.8 percent jump. For co-ops, the median price comes in at $428,000, and for one- to three-family homes it’s $830,000. The average sale price for all luxury property (at the top 10 percent of the market) is $3.099 million, nearly 25 percent higher than last year. Much of the high prices, Miller says, are from closings happening at new developments this past quarter.
Miller also points out that “what’s unusual is that sales are rising and inventory is falling.” He explains in smart guy jargon, “with rising sales and falling inventory, the pace (absorption) was fastest (lowest) in the seven years I have [had] that metric.” However, he notes that there’s little negotiation happening over sales price and listings are spending a little longer on the market, meaning that Brooklyn buyers aren’t biting if the prices are too high.
Queens also saw some record-setting sales prices, “and a lot of if has to do with the Brooklyn spillover,” Miller says. Overall, the median sales price jumped 10.7 percent to $499,000, a record, with the average sales price increasing just under eight percent to $562,216, another record. The number of total sales rose just three percent, to 3,751.
Price trends for condos, co-ops, one- through three-family homes and luxury properties all set records in Queens as well. The average condo sales price is $613,337, 7.4 percent higher than last year. The average co-op price is $266,574, a six percent leap. One- through three-family homes averaged at $677,234, while luxury properties sold for an average of $1.276 million. Like Brooklyn, the Queens market is moving fast, with absorption at its fastest pace in 11 years.
All those rising numbers got your head spinning? The rental report offers a little relief. In Manhattan, the median rental price declined for the second time in 2016—it’s now $3,396/month, 1.2 percent lower than last year. The average is at $4,117, .8 percent higher than last year. “It’s not that we should expect the market to fall significantly,” Miller says, “But rather that we expect to bump along over the near future since the rental market is sitting on top of a fairly strong city economy.”
There are two reasons for the price dip, according to Miller. First, there’s tons of inventory from new developments with prices skewed to the high end, at the same time investors are putting tons of rental apartments onto the market. Secondly, the non-luxury market hasn’t seen much new housing stock. “Think of it as stagnant supply,” Miller says.
Renters shouldn’t get too pumped. Because New York’s population growth is five years ahead of projections, and the city is experiencing record job growth, renters aren’t seeing tons of relief other than more concessions. The size of concession this quarter are 1.2 months of free rent or equivalent, which is unchanged from last year.
Brooklyn experienced decreases on its median rental price for two months in a row, then started surpassing its year-ago numbers. “I see this market also in a ‘high plateau’ where prices bump along up and down slightly each month,” Miller says. Overall, the median rental price rose 2.4 from last year to $2,949/month, with the average rental price increased 2.5 percent to $3,197. The number of new leases surged 85.6 percent, to 1,248, due to lots of new housing stock.
Queens rental prices are less predictable, bouncing around depending on what type of product is available. Median rental price was $2,787, down 5.7 percent—in the northwest region of Queens including Long Island City, Astoria, and Woodside, that’s the seventh time prices have declined in the past year. Average rental price fell 5.4 percent to $2,881. The number of new leases rose 12.3 percent to 274.
Corcoran’s third quarter report focused on Brooklyn sales. The numbers show that Brooklyn buyers “have greater options with more listings on the market, however the additional inventory has been largely at the high end. Transactions are also taking longer to complete, verified by a higher days on market figure.” The median sales price of $675,000 was the highest tracked by Corcoran in eight years. The average $950 per square foot sales price also set a record. Corcoran tracked major price increases for new development sales price, finding the average rose 69 percent from last year, to $1.7 million, while the median sale price rose 27 percent to $999,000.
Source: Curbed New York