Brooklyn exhibited varied market signals this quarter as buyers continued to endure supply constraints at lower price points and sellers experienced tempered demand at the high-end.
Closed sales reached its second highest figure in a decade, though only half the borough – the less expensive half – experienced increased sales. Contract activity fell 7% annually, hindered by persistently low inventory levels. Meanwhile, price statistics were dictated by high-end buyer hesitancy as well as ongoing geographic shifts in favor of neighborhoods offering value in a price-sensitive climate. Closed sales rose 5% versus a strong Second Quarter 2017 to 1,620 closings. The overall gain in sales was driven by resale co-ops, with a 13% uptick, and new development closings, which rose 12%. Both these markets currently offer value; co-op median price displayed only modest gains and new development price statistics declined annually for the fourth consecutive quarter. Resale condo sales plunged 11% as not enough buyers were incentivized from a price perspective compared to new product.
Median price and average price figures declined relative to high pricing a year ago, falling 8% and 6%, respectively. However, price figures were commensurate with the quarters just prior to the recent peak when a greater concentration of sales were in prime areas of the borough. In fact, prices trended upward quarter-over-quarter even as buyers continue to push further afield, demonstrating upward pressure on prices in historically low priced areas.
Manhattan market activity cooled in Second Quarter 2018, noting fewer closed sales, more inventory, and steadying prices. At the moment, prospective buyers have a lot to consider, including renewed financial market volatility, the still-fresh implications of tax reform, overwhelmingly high levels of supply, and a belief that prices will fall further. Together, these factors delayed buyers’ decision-making, softening market activity versus last year. Despite market factors, signed contracts and sales improved versus last quarter, as buyer demand for Manhattan properties still saw its seasonal uptick in Second Quarter 2018.
Closed sales fell 14% annually, but still registered nearly 3,200 transactions. At the same time, about 3,100 contracts were reported signed, down 9% annually. Active inventory expanded 17% year-over-year to approximately 7,500 listings, a dynamic which helped extend the average number of days on market to 121 days, up 13% from this time last year.
Price statistics responded to fluctuations in market share by product type and price range. Average price per square foot, at $1,853, was level while average price rose less than 1% year-overyear to $2.151M, an all-time high stoked by record-breaking closings Downtown and an uptick in sales over $5,000 per square foot. Meanwhile, median price fell 3% to $1.143M due to an improved market share of sales under $3M as the composition of sales shifted slightly in favor of lower-priced resales and fewer new development closings.