“While it is too early to tell if the market has turned a corner, the fact that contract activity improved amid record-low inventory proves Brooklyn is still an incredibly in-demand and competitive market. Though closed sales fell in 2023, many properties representing good value received multiple offers, and pricing remains robust.
As we enter 2024, the forecast of lower mortgage rates and a solid economy may inspire an earnest rebound in the Brooklyn market. This quarter’s results paint a cautiously optimistic backdrop as we head into what’s sure to be a dynamic 2024.”
– Michael Sorrentino, SVP, General Sales Manager, NY
Though the Brooklyn market started 2023 with the challenges of high mortgage rates, record-low inventory, and pricing pressure, the end of the year saw marked improvement after closings fell less than previous quarters, signed contracts improved, and days on the market on par with the stronger market of a few years ago. As mortgage rates settle and the economy is on an upward arc, there is cautious optimism heading into 2024.
- Closed sales moderated annually for the seventh quarter in a row, the first time since Corcoran started reporting over 15 years ago.
- Sales fell close to 30% YOY to approximately 1,100 closings, making 4Q 2023 the slowest fourth quarter since 2012.
- On a positive note, the number of contracts signed was up 16% QOQ and 3% annually, marking the first time signed contracts improved in two years.
Price statistics in Brooklyn reflected the inventory constraints, high mortgage rates, and buyers’ search for value. Those ready to purchase a home in Brooklyn turned to resale co-ops and locations farther east and south, resulting in a decline in median price and average price per square foot.
- Prices are now below where they were during the red-hot market of 2021 through early 2022 and are level with their five-year historical averages.
- Median price fell 3% YOY to $725K.
- Average price declined 5% to $968K this quarter, the second lowest figure in nearly three years.
- With increased activity under $350K, re-sale co-op median price fell 2%, but, with an uptick in sales over $1M, resale condos saw median prices jump 3% YOY.
- Fewer new development transactions in high-priced neighborhoods drove New Development price figures down, with median price and average price per square foot dropping 3% and 7% YOY, respectively.
It’s too early to tell if the market has turned the corner, but as deal activity improved even with record-low inventory, Brooklyn, with its endless appeal, proved the depth of its demand.
- Inventory fell for the ninth consecutive quarter, down 22% YOY to 1,262 listings. Listings priced between $500K to $750K fell by 40% annually, while listings for homes between $1M and $2M rose 2% YOY. Inventory also fell across all unit types, with studio supply down 43% YOY.
- All product types are undersupplied in Brooklyn due to post-COVID dynamic activity, a drop in new development launches, and sellers locked into low mortgage rates.
- Days on market fell below the five-year historical average, with sales between $750K and $1M falling 21% (or by 16 days).