Although Brooklyn sales fell short of last year’s best spring selling season on record, in context, Second Quarter 2019 was still relatively strong. Over 1,500 apartments closed between April and June, one of the highest recorded sales figure for any second quarter in the past decade.
The difference this quarter versus prior second quarters, is that new development sales comprised their highest share of closing figures in seven years, yet most of these contracts were signed in earlier years. The resale market, a more direct snapshot of recent sales activity, underperformed and reached a six-year low. Reported contracts signed figures also saw a drop, and having declined annually for the past eleven quarters, directly influenced the downward trend in closing figures. Yet, despite the easing sales activity, which caused inventory to expand by double-digits, the listings that did transact did so with fewer days on market than last year.
A few signs of strength in the Brooklyn market emerged this quarter, including an elevated portion of sales across all product types in the $1M to $2M price range. Nearly one-quarter of all buyers transacted in this price segment, the highest share on record. The volume of sales in this price segment ushered in the first year-over-year price increase in two years. Overall average and median price rose to its highest point since early 2017 and notably, the resale condo median price figure set a new record.
Manhattan’s challenging real estate market welcomed reassuring news in Second Quarter 2019. Market wide sales increased year over-year for the first time in two years, up 5% annually to over 3,300 sales totaling $7 billion, about $1 billion more sold than last year. Yet it may be too soon to tell whether the Manhattan housing market is in the early stages of regaining momentum, as many sales were new development deals where the contract was signed in prior quarters and others were buyers rushing to close before new taxes take effect July 1.
Second Quarter 2019 sales improved thanks to an 82% spike in new development closings, as resales endured another year-overyear drop in activity. Signed contracts, a more reliable indicator of current market activity, were stable with this time last year, supported by a rush of activity in April despite declining on an annual basis by May and into June. At the same time, the already high supply kept growing, surpassing 8,000 listings for the first time since 2011. Many sellers cut prices and negotiated further, but buyers remained skeptical about future market conditions and prices, pushing days on market to a six-year high.
Price figures also belied real estate agents’ on-the-ground experience this quarter. Versus last year, median price rose to a record high of $1.225M while the average increased to $2.119M, itself a two-year high. But these statistics do not reflect the reality that Manhattan prices continue to fall. Instead, this quarter’s statistics were skewed upward by the flurry of higher priced closings in new developments that finished construction this quarter, many of which entered into contract years ago in a better market. Price per square foot figures, on the other hand, were essentially unchanged compared to last year and would have actually declined were it not for the spring influx of sponsor sales within towers located in prime locations like Central Park South and Downtown’s west side.