At the start of 2019, Brooklyn buyers faced still-lingering uncertainty in the market surrounding the effects of tax reform while sellers grappled with downward pressure on prices. As a result, the for-sale market registered 9% fewer transactions versus a year ago. However, worth noting is that 2018 had the second highest number of transactions of any first quarter in the last ten years. The pace of sales during First Quarter 2019 was still higher than the starting quarters of both 2015 and 2016, yet prices were far lower during those years.
Overall sales dipped to 1,279 closings due to a six-year low figure in the resale condo market and 19% fewer closings of new development closings. Resale co-ops remained relatively stable, with sales actually improving 2% annually. Activity waned inconsistently across price points, though in general share of sales over $750,000 fell 6%. This quarter, sales continued to contract in Williamsburg / Greenpoint while Bedford-Stuyvesant, Crown Heights, Lefferts Gardens & Bushwick doubled its market share versus a year ago. This dynamic suppressed market wide median and average price annually for the fourth time in the past six quarters. The 18% annual increase in inventory provided buyers with more choices relative to last years’ lowest First Quarter in five years.
In Manhattan, the challenging market continued in First Quarter 2019 as sales declined amid affordability, supply and tax headwinds. Market wide closings fell 5 percent year-over year to about 2,400 sales, the lowest quarterly total in ten years. Notably, resale co-ops dropped only a minimal 2 percent, while new development and resale condo sales saw deeper declines. Contracts signed fell by a similar percentage, down 6 percent annually, but were up versus the prior quarter.
Meanwhile, prices continued to moderate, with median price statistics, less vulnerable to very low or very high priced sales, declining for their fifth consecutive quarter year-over year, something that has not happened since 2010. Median price fell 2 percent year-over-year to $1.074M, 10 percent lower than its spring 2017 peak. Median price per square foot declined as well, falling by a deeper 6 percent annually to $1,246, now nearly equal to what it was in Second Quarter 2015.
At the same time, Manhattan set a new record in First Quarter 2019 with the closing of the highest priced home ever sold in the United States: nearly $240M for PH50 at 220 Central Park South. This sale, plus more than twenty others over $20M, drove average price 11 percent higher year-over-year, the greatest annual increase in more than two years. This quarter’s average price and average price per square foot were the second highest ever seen in Manhattan.
Inventory and days on market rose this quarter versus the same time last year, to be expected in a lower sales environment. But listed inventory actually fell versus the prior two quarters, suggesting it may now be past its peak, which would be a positive development for a market eager to see improvement.