Brooklyn Q4 Report
The 4th Qtr. 2016 saw continued 2016 trends of record sale prices achieved and challenged inventory levels – less availability at the lower end of the market and increased inventory at the high end.
Contracts signed this quarter were almost level with the previous quarter, but market-wide closed sales and contracts signed were lower this quarter than a year ago.
Closed sales, which reached an all-time high in the fourth quarter of 2015, declined 26% in the fourth quarter of 2016. Contracts signed were 1% less than 3rd Qtr. 2016 and 12% below a year ago.
Inventory played a role in the softening of sales this quarter. Despite a 13% market-wide overall increase in inventory to 2,267 units, the persistent lack of inventory at the lower end of the Brooklyn market continued in the 4th Qtr. The number of available resale co-ops – Brooklyn’s largest property category with generally more accessible and affordable prices – had little inventory gain, increasing just 2% vs. a year ago and resale condominiums declined 5% compared to last year. This was a significant barrier for buyers looking to enter the market and for buyers looking to move up to larger properties.
4th Qtr. 2016 average and median sale prices both rose year-over-year by 33%, to record levels: $908,000 (average price) and $732,000 (median price). This reflects the effect luxury new development closed sales had of driving prices upward this quarter.
The new development sector had the highest sale prices this quarter. The average new development sale price rose 45% to $1.54 million and the median new development sale price rose 14% to $950,000.
Brooklyn’s new development inventory rose a dramatic 96% in the 4th Qtr. 2016. The number of new, development properties, generally priced at the higher end of the market, almost doubled compared to 4th Qtr. 2015, increasing from 289 units to 566 units.
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Manhattan Q4 Report
2016 ended much as it began – with a variety of mixed signals indicative of shifting market conditions. Average price per square foot was up 6% year-over-year. But its 1% quarter-over-quarter change reflects the steadying of price per square foot since the beginning of the year. Median price dropped 8%, and has had declines every quarter since its peak in First Quarter 2016, as fewer larger apartments closed as compared to earlier quarters. Yet median price per square foot dropped less, at 2% year-over-year, and was up 1% quarter-over-quarter, again indicative of steadying pricing. Similar to the previous quarter, the number of closed sales and contracts signed both decreased versus Fourth Quarter 2015. However, versus a quiet Third Quarter 2016, contracts signed rose. Both active inventory and months of supply increased.
Manhattan overall closed sales decreased 15% year-over-year in Fourth Quarter 2016, dropping to 3,104 closings. Signed contracts were also down, decreasing 15% year-over-year. A combination of factors has influenced changes in the market such as record high prices, the continued undersupply of lower priced and efficiently sized condominium and cooperative units, and the cyclical political and economic uncertainty that comes with election years.
Inventory increased by 16% from Fourth Quarter 2015 to 5,865 active listings. The increase in available inventory combined with the year-over-year fall in sales led to a 31% increase in months of supply, and units spending on average 95 days on market a week longer than a year ago. Average price rose to $1.991M in Fourth Quarter 2016. This increase was influenced heavily by a large number of high-priced new development closings throughout the quarter. The median Manhattan sale price, however, fell by 8% year-over-year to $1.024M, reflecting the fact that the market share of closings achieving $1.00M or more fell by 3% from Fourth Quarter 2015, to 50%.
Median apartment price by size was mixed. Studio apartments had the largest increase, up 7% from last year to a median of $520K, followed by a 6% increase in the 3+ BR median to $4.150M. Price per square foot metrics followed absolute pricing metrics, with the average increasing to $1,851 per square foot and the median falling to $1,324 per square foot.