This N Y Daily News article reinforces just how hot the Brooklyn real estate market is right now. As affordability of homes close to Manhattan continues becomes harder for many buyers, the homes deeper into the borough are now under consideration .
Soon enough, no one will be able to afford Brooklyn.
A lack of inventory coupled with strong demand sent the average price of a residential property in the borough to a record $783,296 in the second quarter, up 16.6% from the year-ago period, according to a report from Douglas Elliman.
“Prices pretty much soared,” Frank Percesepe, senior regional vice president, Brooklyn, at Corcoran Group, told the Daily News.
“The inventory crunch continues. We would have done much more business if there was more to sell.”
With Brooklyn prices rising, the borough’s affordability rep is rapidly fading.
The gap in median sales prices between Brooklyn and Manhattan has gone from $500,000 in the second quarter of 2008, before the real estate market tanked, to $335,000 today – a 33% decline, according to Douglas Elliman.
“The spread is narrowing,” Jonathan Miller, CEO of appraisal firm Miller Samuel, which compiles the Douglas Elliman report, told the Daily News.
Brooklyn’s luxury market, representing the top 10%, also broke records: the median sales price of a luxury property surged nearly 30% to $2,138,325, Douglas Elliman said.
There were 103 sales in the borough priced above $2 million, according to Corcoran. Of those high-end deals, 58 were townhouses, including the sale of 273 Hicks St. in Brooklyn Heights for $6.4 million.
Brooklyn’s inventory crunch has been fueled in part by a stall in condo development during the financial crisis.
We would have done much more business if there was more to sell.
New condos, such as Toll Brothers’ Pierhouse at Brooklyn Bridge Park, are now coming into the market, but it will take some time before the borough sees a sizable number of new units.
“Supply has increased, but continues to be extremely low,” said Douglas Elliman executive vice president Yuval Greenblatt.
With demand building, buyers are pushing into neighborhoods that they may not have considered in the past.
“We are starting to see, in small ways, deals in places where we had done little before, including Cypress Hills and East New York,” Percesepe said. “I am seeing a push deeper into Brooklyn.”
While Brooklyn was on fire in the second quarter, the Queens sales market cooled off.
The average price of a Queens home fell 6.1% to $414,640, according to Douglas Elliman. Every Queens region, with the exception of South Queens, saw prices go down.
“After six quarters of rising activity and prices, Queens took a breather,” Miller said.
The luxury market was stable. The median sales price at the high end rose 1.1% to $990,000. A limited supply of new condos is expected to push prices up in neighborhoods like Long Island City.
“Long Island City will be the next to break the $1 million condo average,” Greenblatt said.