A slew of Brooklyn real estate reports released Thursday point to one conclusion: New condominium developments are dominating the borough’s property markets, as both sales and market share of this segment soared during the third quarter.
From July through September, 283 new condos were sold in Brooklyn, increasing 148% from the same period last year, according to Douglas Elliman’s report.
These new condos, which are hot properties for buyers priced out of Manhattan, accounted for 31.5% of all Brooklyn’s condo sales overall during last quarter. By comparison, the market share for new condos was 13.5% during the third quarter last year.
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The median price of new condo apartments in the borough, meanwhile, reached $915,000, increasing 17.5% year-over-year.
All property types considered, the median price of the 2,914 residential sales in Brooklyn was $790,000 by the end of September, rising 7.5% from a year ago, according to Douglas Elliman.
This new condo boom is further evidenced in reports also released Thursday by other major brokerages tracking Brooklyn sales. It’s worth noting that brokerages compile data from different sources, including raw public data and their own transactional records, so discrepancies exist even for the same category of data.
According to a Stribling & Associates report, the average Brooklyn sales price surpassed $1 million for the first time, boosted mainly by new, luxury condominiums.
"Over the past several years, an incredible amount of new product has been constructed, particularly in the North and Northwest submarkets," Garrett Derderian, director of data and reporting at Stribling, said in the report. "The resulting price increases have caused somewhat of a ripple effect across the entire borough."
Condo apartments, including new offerings and resales, accounted for 48% of all sales in Brooklyn. The average condo sales price stood at $1.2 million during the third quarter, a 5% increase year-over-year. Co-ops took up 30% of sales with an average price of $609,159 (-6% year-on-year), while townhouses and single-family homes had a combined market share of 22%, with an average price of $1.47 million (-4% year-on-year), according to Stribing.
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New, large-scale projects commenced closings
Several large-scale new developments began closings during the third quarter, contributing to the overall strong performance of this sector, according to the Corcoran Group. Among these developments are 550 Vanderbilt, The Vue Condominium, 251 First Street, Austin Nichols House and others.
According to Corcoran’s data, 1,670 sales in Brooklyn closed during the third quarter, representing a 31% increase year-over-year and the highest level in nine years. In addition, another 1,061 contracts were signed during the last three months, a 15% increase over the third quarter last year.
New developments accounted for 394 sales, rising 132% year-over-year. However, the average price was 32% lower compared to the third quarter in 2016, partly due to an oversupply. New condo inventory increased 6% year-over-year to 505, according to Corcoran.
Separately, Brown Harris Stevens found that the average sales price of Brooklyn condos rose 13% year-over-year to $994 per square foot. Including all condos and co-ops, the average apartment price was $845,879, 2% higher than the third quarter last year. Meanwhile, the brokerage firm continued to see robust price growth in Brooklyn townhouses. During the three-month period from July to September, townhouses were sold at an average $1.21 million, a 16% increase year-over-year.
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Luxury sales in Brooklyn cooled off
In terms of price points, luxury properties in Brooklyn continued to cool, partly due to competition from the emerging luxury market in Queens.
According to Douglas Elliman, the top 10% of the most expensive sales in the third quarter, which the brokerage defines as luxury, had a median price of $2.5 million, unchanged from the same period last year. The average price was down 6.7% year-over-year to $2.89 million.
The number of luxury sales, at 271, was 3.9% less (amounting to 11 fewer transactions) than the third quarter in 2016.
By contrast, the number of luxury sales in Northwest Queens jumped to 429 in the third quarter, a 12.6% increase from the same period last year. The median price rose 5.9% to $1.25 million, while the average price rose 5.8% to $1.35 million throughout the region, which increasingly drew more luxury buyers who traditionally focused on Manhattan and Brooklyn.
Corcoran’s data drew a more negative picture of Brooklyn’s luxury market, which is also deemed as the top 10% of sales. During the third quarter, the median sales price of luxury homes was $1.95 million, falling 16% from a year ago. The average sales price also dropped 19% year-over-year to $2.29 million.
Although Stribling doesn’t have a separate luxury category, its breakdown of different price points also showed a cooldown in higher-end markets in Brooklyn. The median sales price of $3 million-plus homes was $3.695 million in the third quarter, 2% lower than the same period last year.
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Luxury rental markets flatlined
While luxury sales suffered some losses, Brooklyn’s luxury rental market was also held at bay, according to a separate rental report by Douglas Elliman.
The top 10% most expensive leases signed between July and September had a median price of $5,500 per month, slightly up 1.6% compared to the same period last year. The overall median rent in Brooklyn dropped 5.1% to $2,800 per month.
Northwest Queens fared better both in overall and luxury rental markets compared to those of Brooklyn. The area’s top 10% most expensive leases signed during the last three months had a median price of $4,775, rising 20.1% from the third quarter last year. Across the region, median rent edged up 0.2% to $2,793, very close to Brooklyn’s level.
In Manhattan’s rental market, the top 10% most expensive leases had a median price of $8,200 per month, not far off from last year’s $8,121 per month.
But the number of luxury leases was sharply down on both a yearly and quarterly basis. There were 471 luxury rental transactions with a minimum rent of $6,395 per month, a 10.3% drop from the third quarter last year. Compared to the second quarter of this year, the number of leases saw a 33.5% slump.
The average Manhattan luxury rent stood at $10,027, still above the $10,000-per-month mark seen in the second quarter this year and the third quarter in 2016.
Overall, Manhattan’s median rental during the third quarter was $3,400 per month, up 0.1% from the same period last year, but down 1.2% from the second quarter of 2017.