Brooklyn Apartments Slip as Queens Luxury Real Estate Market Hits New Record
Is the balance of real estate power in the outer boroughs starting to shift?
Brooklyn’s standing as buyers’ favorite New York City outer borough may be slipping.
Prices in Kings County fell in the second quarter just as Queens luxury market set a record, according to reports out Thursday from three of New York City’s biggest brokerages.
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Along with falling prices, Brooklyn saw sales volume drop and inventory rise, according to data from Douglas Elliman, Stribling and Associates, and Corcoran.
In the second quarter, Brooklyn’s median sales price fell by as much as 8% according to Corcoran, while Douglas Elliman’s report registered just a 1.9% decline.
But that’s not to say the market is down, said Jonathan Miller, chief executive of property appraisal firm Miller Samuel and author of Douglas Elliman’s report.
“The median sales price in Brooklyn has been rising year over year for five-and-a-half years,” Mr. Miller said. “This is the first decline since 2012.”
“This isn’t a market where prices are now much more affordable. It’s still moving at a blistering pace,” Mr. Miller said
Northwest Brooklyn, the area closest to Manhattan, performed best, Stribling said, as prices there had the borough’s highest median price—$1.16 million.
The top end of the market dipped too, as the median sales price for luxury property—defined as the top 10% of the market—slipped 2.1% to $2.46 million, according to Douglas Elliman.
Despite the falling prices, Brooklyn buyers weren’t lured in, a sign of affordability issues, Mr. Miller said. The number of transactions logged fell in the second quarter compared to the same time in 2017, according to Douglas Elliman and Stribling: down 5.7% and 6%, respectively.
But by Corcoran’s data, closed sales in Brooklyn were up 5% over last year, the second-highest number of second-quarter closed sales in 10 years, the brokerage said. The figure was buoyed by sales in South Brooklyn, which saw a 22% increase in sales activity, as buyers pushed further into the borough to find value.
Inventory was up across the board, but by varying degrees. Supply rose to 7.3 months from 6.9 months, according to Stribling, by 3% according to Corcoran, and rocketed 18.5% according to Douglas Elliman figures.
Queens is Rising
While Brooklyn struggled in the second quarter, Queens fared better, especially its luxury market.
Median prices rose across the borough, though transaction volumes took a hit, according to Douglas Elliman and Stribling. Corcoran did not release a report for Queens.
Both brokerages put the median sales price at between $550,000 and $560,000—a 5% increase from last year, according to Stribling and an 11.6% increase, per Douglas Elliman.
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The luxury market saw a record set in the borough, according to Douglas Elliman, as the median luxury sales price increased 4.8% to $1.31 million.
The borough has “benefited from the Brooklyn spillover,” Mr. Miller told Mansion Global.
Demand for real estate in Brooklyn has “challenged affordability,” in the borough, he added, and those pushed out of Brooklyn have bought a “significant amount of demand to the Queens market.”
The second quarter saw 2,872 recorded sales in Queens, said Stribling, 6% less than a year ago. The largest share of closings went to houses and townhouses, and the price gains weren’t limited to the areas closest or most easily accessed by Manhattan.
“The southwestern and southeastern submarkets experienced the most significant growth, indicating that buyers are willing to venture beyond the Long Island City waterfront to purchase a home,” said Stribling’s report.
The City’s Suburbs
A little further afield, Westchester, a suburban area within commuting distance of New York, logged its fifth consecutive quarter with year-over-year median sales price increases, and saw the highest second quarter median sales price since 2007, according to Douglas Elliman.
The median sales price in the county rose 5% to $525,000 and values at the top end of the market edged up 3.3% to $2.27 million.