Following one of the most active quarters’ in recent years, sales activity in Brooklyn varied widely across neighborhoods and product types. Robust activity continued as value-seeking buyers pushed further afield in the borough, yet signs of buyer hesitancy emerged in other areas. Market activity muted in northern and western parts of Brooklyn where prices remain high, and buyers were particularly resistant to purchasing in Williamsburg as the L-train suspension date draws nearer. On the other hand, neighborhoods on the southern and eastern edges of Prospect Park, which offer value relative to the borough-wide price figures, saw a surge in sales at such a rate that inventory could not keep pace.
Despite pockets of strong demand, overall sales dipped 7% year-over-year to 1,574 closings. Notably however, Third Quarter 2017 holds the record for the strongest quarter in the last five years and the sales figure achieved this quarter was the second highest third quarter sales figure. Low levels of inventory, predominantly at lower price points, constricted contract activity by 8% compared to a year ago.
Several new development sales at the high-end contributed to the average price gain despite a slight weakening in the overall median price figure compared to last year. Median price was 3% below Third Quarter 2017, yet the figure of $702,000 was still the second highest third quarter figure seen in recent years.
Manhattan buyers remained cautious during Third Quarter 2018 due to lingering concerns over new tax implications and the continuing belief that prices will reduce further. Despite a healthy economy and a robust stock market, the urgency to buy is diminished unless a property demonstrates clear value. Many buyers are taking a wait-and-see attitude and as a result sales declined and inventory spiked versus Third Quarter 2017.
Closings fell 10% year-over-year, but at 3,327 sales were up 5% versus Second Quarter 2018. The annual decline was driven by 8% fewer resale co-op sales and 37% fewer new development closings. Resale condos, however, noted a slight increase in sales, up 2%, as the limited selection of affordable new development options push buyers to the resale market. Another positive sign is a stabilization of sales at the high-end, where price discounts and negotiability are the highest, spurring buyers to finally act.
Price statistics exhibited varied signals this quarter as price per square foot statistics declined but average and median price increased. Average and median price per square foot were both down 3%, dipping to levels last seen in Third Quarter 2015. Yet absolute average and median price statistics rose 2% due to an improved market share of apartment sales with two or more bedrooms. This actually drove resale co-op median price to a record high, and resale condo median price to its second highest figure ever.