Home sales in Brooklyn, New York’s most populous borough, declined in the third quarter as a falling supply of properties gave would-be buyers little to choose from.
Purchases of condominiums, co-ops and one- to three-family homes totaled 2,171, down 2.2 percent from a year earlier, New York appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today in a report. The inventory of homes listed for sale dropped 16 percent to 5,602.
“The last couple of years in Brooklyn, you’ve had a lot of the excess supply worked off,” said Jonathan Miller, president of Miller Samuel. “It’s getting to the point now where it’s starting to restrain gains in sales.”
The inventory has decreased in each of the past four quarters as owners are in no rush to list their homes in a market where leasing costs are poised to climb, according to Miller. Those who bought during the real estate boom and saw their values tumble in the crash may not have built up enough equity to trade up, he said.
Buyer demand will last as long as borrowing costs are low, Miller said. The average rate for a 30-year fixed U.S. home loan fell to a record 3.36 percent earlier this month, according to McLean, Virginia-based mortgage-finance company Freddie Mac. The Federal Reserve has signaled it will keep interest rates low through 2015.
The pace of sales in the third quarter was the fastest since Miller Samuel began tracking the data in 2008. The absorption rate, or the amount of time it would take to sell all the listed properties at the current pace of deals, was 7.7 months, down from nine months a year earlier. Properties spent an average 117 days on the market, or 22 percent less time than last year.
“If it continues at this pace, the problem is going to become acute and we’ll start seeing more pronounced price appreciation,” Miller said.
The median price of Brooklyn homes that sold in the quarter was $506,000, little changed from a year earlier and 6.3 percent below the 2007 peak, he said.
Home prices in the borough slid as much as 18 percent from that peak to their bottom in the second quarter of 2009, according to Miller.
Corcoran Group, which also released a third-quarter report today, said the median price of resale co-ops and condos in Brooklyn was $439,000, up 1 percent from a year earlier and 13 percent from the previous three months.
In new developments, the median sale price climbed 12 percent from a year earlier to $635,000, New York-based Corcoran said.