At the close of 2022, Brooklyn was not immune to the challenges affecting almost every for-sale market.
“Brooklyn was susceptible to the same challenges which impacted Manhattan and other markets this quarter. Sales may have decreased year-over-year, but it’s important to note the nearly 1,600 closings during 4Q surpassed the sales average between 2010 and 2020. There has been a lack of available homes in the borough for five consecutive quarters, with inventory this quarter hitting its lowest level since 2013. This means competition in prime Brooklyn neighborhoods remains high.
Many buyers are looking for value, which has driven the overall median price — and the level of lower-priced inventory — downward. For example, the number of active listings between $350K and $750K saw almost a 20% drop. While the market may not look the same as last year, the borough is still one of the most desirable places to live in the country, and there will always be demand to live in Brooklyn.”
– Michael Sorrentino, SVP, General Sales Manager, NY
Increased mortgage rates, the unpredictable stock market, and economic uncertainty made buyers hesitate to finalize a deal.
- There were 1,565 closings in 4Q 2022, a 24% annual decline and the lowest figure since the market pause in 2020. However, this figure is still above the pre-pandemic average from 2010 to early 2020 of 1,250 closings per quarter.
- Contract activity was down in the fourth quarter both annually and quarter-over-quarter, but compared to 4Q 2021’s record-breaking year and considering market seasonality, this is unsurprising.
- New Development captured its second largest proportion of Brooklyn sales in over a decade.
Inventory throughout Brooklyn’s submarkets was down 9% annually. This kept the market competitive in many neighborhoods and price points.
- The number of available listings declined for the fifth consecutive quarter, hitting a nine-year low (excluding the market pause of 2020).
- Inventory declined in all price segments but was most significant below $350K, and from $750K to $1M, which declined 18% and 19% respectively.
- Studio inventory was up 8% YOY, and it is the only unit type to see an increase in inventory in 4Q 2022.
- Williamsburg–Greenpoint, and Fort Greene–Clinton Hill–Prospect Heights were the only submarkets in Brooklyn to see increases in inventory — 1% and 8%, respectively.
The market share of sales for homes under $500K and over $1M grew compared to last year, leading to mixed price metrics across all units.
- Overall median price hit $760K in 4Q 2022, a 5% decline from last year, due to a larger share of sales under $500K. This is also the lowest median price in the last eight quarters.
- With a shift in sales to North Williamsburg and Park Slope, the median and average price per square feet hit its highest point in five years.
- Median prices for 3+ bedroom resale co-ops decreased by 29%, while the same size unit in resale condos and New Development saw median price increase a sharp 70% and 50%.
- As buyers search for value and lean toward lower priced units, the average days on market for sales from $750K to $1M jumped 20% to 75 days.