According to first quarter sales reports from Brooklyn, anybody looking to purchase a home in that borough had better have deep pockets. The median sale price for homes there is at a record level. A year ago, a home in Brooklyn that would cost $662,431, will now cost &770,000, according to reports by Douglas Elliman. This is the third consecutive rise in median home prices in Brooklyn. Another example of this rise is the increase in average sale prices. They are now at a record high of $993,000, 25% higher than last year. The average then was $795,409.
The reason behind this increase, according to Douglas Elliman is closings at new development condos, which is making houses more and more valuable. According to the Law of Supply and Demand, the more scarce a Supply becomes while the Demand remains High will lead to an increase in prices. The number of home sales has increased for the economic quarter with 2,800 homes sold, an increase of 46.4% from last year. All this is occurring while the listing inventory for homes has fallen 19.9%. this has made this the second lowest home inventory tracked in nine years and the fastest paced that the Brooklyn housing market has been in nine years as well.
Some neighborhoods that have been the most popular for sales in general have been brownstone Brooklyn neighborhoods (which has seen an increase in development closings) and North Brooklyn where anyone looking for an apartment will have to deal with average prices hovering around $1,108,135.
Other places that have seen price increases for homes have been Central Brooklyn, with apartments selling for an average price of $636,544, an increase of 9% from last year. Median townhouse prices alone increased 12% to $795,000.
According to the real estate firm Corcoran’s sales reports, “Consumer sentiment improved as buyer hesitancy of the previous two quarters faded and people committed to buying now. New development closed sales soared upward as a number of large-scale projects began unit closings.”
Corcoran further reported that not only did closed sales around the market increase 7% from last year, but that signed real estate contracts also increased 14% from last year as well. The neighborhoods that particularly saw this increase in sales were Brooklyn Heights, Cobble Hill, Dumbo and Downtown.
However, going back to the point about Supply and Demand, housing inventory for cheaper apartments and condo re-sales has gone down, which will make real estate pricier.
By: Anat Ghelber