“The Brooklyn market continues to cool due to the same headwinds affecting markets nationwide. At the beginning of 2023, higher mortgage rates and fluctuating economic conditions gave buyers and sellers pause, causing an annual decline in both sales and inventory. Buyers continue to look for value, with the majority of deals closing under $750K, drawing the median price down to its lowest point in ten quarters.”
– Michael Sorrentino, SVP, General Sales Manager, NY
The Brooklyn market continued to face several economic challenges in the first quarter of 2023, bringing an annual drop in sales, sales volume, and contracts signed.
- There were 1,164 closings in 1Q 2023, a 46% annual decline and the lowest figure since the 2020 market pause. Yet, this figure is essentially equivalent to the average of first-quarter sales from 2010 to 2020.
- The number of contracts signed, while up an encouraging 5% over 4Q 2022, was still down 38% from last year’s record-breaking figure.
- As a result of decreased market activity, sales volume dipped 48% YOY to $1.135B.
- Resale co-ops hit their lowest sales in the last ten quarters, while resale condos hit their third lowest in the past ten years. Additionally, in a change from the end of 2022, the first quarter of 2023 saw new development hit the hardest of all product types, with a 54% YOY with a decline in closings.
Inventory declined annually for the sixth consecutive quarter, reaching the second-lowest number of available listings since 2014 excluding the 2020 market pause.
- The number of listed apartments declined 12% YOY to 1,665. The slight increase of 3% over the previous quarter, while typical of market seasonality, is still below the average first quarter rise of 6%.
- Inventory declined annually in all price segments except for homes under $350K, which saw an increase of two listings. The price bracket with the largest decline was $750K-$1M, which fell 25% YOY.
- While listings declined annually across most of the borough, Williamsburg and Greenpoint had listings fall 27%, the most significant drop.
- Both resale co-ops and condos saw quarterly increases in inventory, up 11% and 5%, respectively.
With most sales this quarter coming in under $750K and buyers gravitating towards smaller residence, 1Q 2023 saw the lowest median price in the last ten quarters.
- The overall median price in Brooklyn was $729K, a 7% YOY decline.
- The market share of sales for homes under $350K increased by two percentage points, marking a notable change from 2021, when over 50% of sales were over $750K.
- Both median price per square foot and average price per square foot decreased annually and quarterly as sales shifted away from new developments.
- For resale co-ops and condos, median price was on the rise, up 3% and 10%, while new development median price declined 5% as the share of sales from $500K and $750K jumped and sales in other price segments were stagnant.