“In the Third Quarter of 2023, the Brooklyn market faced the familiar challenges of rising interest rates and a lack of inventory. As we saw in Manhattan, Brooklyn sellers are hesitant to forgo their low rates, and buyers are reluctant to close a deal. As a result, sales figures appear down compared to 2022, but in reality, the numbers are normalizing to pre-COVID levels.
Due to the enduring demand to live in the borough, plus the economy on the upswing, and prices holding steady — though they’re ticking upward — anyone looking to make Brooklyn their home should take advantage of this stabilizing market before the end of the year.”
– Michael Sorrentino, SVP, General Sales Manager, NY
Brooklyn remains a market in demand, yet interested buyers are hesitant due to the increased challenges of unseasonably low inventory, rising mortgage rates, and rising prices.
- Though there was an annual decline in sales — these figures are compared to 2022’s near-record highs, which continue to impact the statistics — the number of sales was actually quite close to that of the quarters preceding 2020.
- Contracts signed fell to the lowest quarterly level since 2014, while Days on Market increased 19% YOY to 74.
Overall average price jumped to its second-highest figure on record to $1.069M — an 8% YOY increase.
- Strong new development sales at the high end influenced the increase in average price and price per square foot — more specifically, prices reflect sales at the Olympia Dumbo, as it had 16 sales over $2M.
- Median price increased 1% annually to $810K due to the greater share of sales over $2M.
- Resale co-op average price fell 7% YOY, while resale condo average price was down 3% YOY because of the drop in activity in high-priced neighborhoods and increased market share of sales under $750K.
Would-be sellers with low mortgage rates remain hesitant to list their homes. With only 1,558 available listings, listed inventory fell for the eighth consecutive quarter to the lowest total since 4Q 2013.
- Compared to the recent inventory peak of 1Q 2021, 3Q 2023’s numbers reflect a 40% decline.
- The 5% quarterly decline from 2Q 2023 is atypical of market seasonality, as seven out of the last 10 years have seen large increases from second to third quarter.
- Inventory fell across all unit types and price segments, with studios down 33% annually and homes priced between $750K and $1M down 32% annually.