- Median sale price increases 15% to a record $676,250
- Shrinking supply, escalating costs help push buyers to Queens
Brooklyn homes sold at the quickest pace in at least eight years in the third quarter, extending a surge in demand in New York’s outer boroughs that has sent prices soaring to records.
It took 55 days on average for a Brooklyn home to sell, a record in data going back to 2007, according to a report Thursday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. Competition for a shrinking supply of listings helped push up the median sale price, which jumped 15 percent from a year earlier to a record $676,250.
New Yorkers are pushing out from the Manhattan core as that borough becomes ever-more costly, with the median price of an apartment closing in on $1 million. Demand in Brooklyn is spilling over into Queens, where sales jumped 65 percent in the third quarter, in part because of buyer frustration with escalating values and lack of supply elsewhere, said Jonathan Miller, president of Miller Samuel.
“People of more modest means -- the mainstay of New York City employment -- are under siege in terms of rising prices,” Miller said in an interview. “It’s discouraging for consumers.”
Prices in Brooklyn, New York’s most populous borough, have set a new high every quarter this year. In Queens, the median sale price for condominiums, co-ops and one-to-three-family homes increased 14 percent in the third quarter to a record of $450,865. Properties in the borough spent an average of 92 days on the market, or 17 percent less time than in the third quarter of 2014.
Shortly after she listed a two-bedroom co-op in the Queens neighborhood of Jackson Heights for $589,000, Douglas Elliman broker Marlene Flores got 40 phone calls and an equal number of e-mails from would-be buyers.
“I wasn’t sure which offer to explore first,” Flores said of the bids for the 1,200-square-foot (111-square-meter) apartment, many of which exceeded the asking price.
The eventual buyers, a writer and an employee at Deloitte LLP who lived in Brooklyn, offered $603,000, the most ever paid for a unit in the almost 80-year-old, six-story building, she said.
“People cannot afford Brooklyn,” Flores said. “People have the money to buy, but they just can’t spend it there.”
Brooklyn has evolved since the financial crisis into a market of high-end rentals and a more limited number of condos, most of them priced out of reach for the average buyer. Twenty-four percent of all Brooklyn sales in the third quarter were of homes priced at more than $1 million, according to brokerage Corcoran Group, which released its own report Thursday. In 2010, just 4 percent of deals in the borough were higher than that threshold.
With a scarcity of newly built units, buyers competing for resale homes fueled much of the price gains in the quarter, Corcoran Group said. The median price per square foot reached a seven-year high of $885, up 27 percent from a year earlier, according to the brokerage.
“You have to go in expecting a bidding war, and you have to bid high,” said Frank Percesepe, a senior vice president at Corcoran Group who oversees Brooklyn sales.
The heated competition may be turning away buyers. Jill Braver, a Brooklyn-based broker with Brown Harris Stevens, said attendance at open houses and offers per property dropped in September, as the Standard & Poor’s 500 Index headed for its worst quarterly decline in four years.
“People are saying, ‘Oh my God, if that’s what it’s listed at, it’s going to go higher and it’s already at the top of my price point,”’ Braver said. “So they don’t even try Brooklyn, because it’s perceived as so hot.”
Brown Harris, in its own report on Brooklyn, said sales in the third quarter set records for average and median prices. The report measures deals completed largely in June and July and doesn’t reflect the current state of the market, which may become a little less frenzied as more owners list their homes, Braver said.
A two-bedroom co-op she first listed in May drew 30 people to each of two open houses and yielded three offers. An agreement to sell it at the asking price fell through months later. Now, the unit, relisted just before Labor Day, isn’t drawing as much interest and the price was just reduced, Braver said.
“There’s an uptick in resale listings, and more new-development listings are easing the shortage,” she said. “The resale listings are not going with multiple offers in bidding wars unless they’re particularly well-priced.”
More real estate professionals are eager to do business in Brooklyn. Manhattan brokerage Citi Habitats said Wednesday that it acquired aptsandlofts.com, a firm based in Brooklyn’s Williamsburg section that specializes in newly built rentals and condos in the borough.
The deal gives Citi Habitats its first office in Brooklyn, with 110 agents, and expands its reach to an area where rents and prices continue to climb, said Gary Malin, president of Citi Habitats, which is owned by Corcoran Group.
“Brooklyn is on fire and everybody talks about it all day and every day,” Malin said in an interview. “You drive around here and you see all the cranes and all of these areas that are up and coming, and it seems like something you want to be a part of.”