While the Manhattan market was oversaturated with luxury listings, the city’s outer boroughs and suburban areas saw a shortage of supply during the fourth quarter of 2017, according to reports out Thursday by major brokerages.
In Brooklyn, almost all key luxury metrics saw a downturn on a year-over-year basis, according to Douglas Elliman, which defines the luxury market as the top 10% of sales.
During the fourth quarter, 233 luxury homes sold in Brooklyn, down 10% from the same period of 2016. The average sales price dipped 0.7% to $2.79 million while the median sales prices decreased 1.9% to $2.4 million. Listing inventory shrank 21.1% to 165, compared to last year’s 209, according to Douglas Elliman’s Brooklyn report.
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Data from Corcoran Group showed Brooklyn’s luxury market, the top 10% of closed sales, had a deeper slide in the final three months of 2017. The average luxury sales price of 132 high-end homes dropped to $1.9 million, a 32% decrease from last year’s figure, while the median sales price fell below $2 million for the first time in 18 months, according to Corcoran’s report.
"Many luxury buildings sold out their inventories," said Frank Percesepe, executive vice president of Brooklyn and the East End of Corcoran Group."With low inventory, sales started to taper off."
While Stribling & Associates didn’t have a breakdown of luxury data, the brokerage’s Brooklyn report showed that traditional upscale neighborhoods—like Brooklyn Heights and Dumbo— lost steam in the fourth quarter.
"While we have seen an incredible amount of costly new development in the north and northwest submarkets, the strongest median and average price increases were in the east and south areas, which have historically been more affordable," said Garrett Derderian, Stribling’s director of Data & Reporting, in the report.
There were 177 homes, or 7% of all the 2,532 closings, during the fourth quarter, which were priced above $2 million, according to Stribling.
Amid a softening Brooklyn luxury market, townhouses were a bright spot in the last quarter, according to a report by Brown Harris Stevens. The average townhouse price rose 6% year-over-year to $1.09 million.
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Queens and Westchester fare better
Elsewhere, luxury markets in Queens and Westchester County fared better than Brooklyn in the final three months of 2017, according to Douglas Elliman reports.
There were 412 sales with a minimum price of $1.04 million—the threshold for luxury segment—in Queens. The number was 5.1% higher than the same period of 2016.
Additionally, the average luxury sales price in the borough gained 1.4% year-over-year to $1.36 million, while the median sales price saw a 0.9% increase, rising to $1.26 million.
New developments continued to lead the luxury market in the New York City borough of Queens. The overall market share of this property type increased from 2.2% in 2016 to 5.6% at the end of 2017. The number of new condo sales soared 137.6% year-over-year to 412.
Record-setting sales prices were achieved in the borough, along with strong quarterly sales. The average new condo sales price passed $1 million, a 10.8% increase year-over-year, while the median sales price increased 4.3% to $948,500, the highest price level on record for the borough.
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In Westchester County, which attracts luxury buyers for its large single-family homes and good schools, the median luxury sales price saw a 6.4% increase year-over-year to $2.05 million. The average sales price was up 7.2% to $2.43 million. The number of closed high-end sales, though, dropped 5.6% year-over-year to 136.
"We contributed that to shortage of inventory," said Scott Durkin, president and chief operating officer of Douglas Elliman.
Although listing inventory during the fourth quarter was up slightly to 1.2% from 2016, it was 16.3% below the third quarter of 2017.