Manhattan vs. Brooklyn Q1 2018 – The Prices
Curious as to how the numbers stack up in Manhattan and Brooklyn? Here’s an infographic to give you a basic overview, based on Corcoran’s most recent quarterly reports for both boroughs. (Click here to view the full Manhattan Report and click here to view the full Brooklyn Report.) The infographic highlights the median price by apartment type for each kind of building covered by the report, and it also gives the lowdown for which areas are likely to be your best bets for affordability. Additionally, especially for sellers, there’s a focus on the median price per square foot for each area.
Note – I prefer to use the median rather than the average because the median represents the middle point – so half of all the listings noted in a given area are above that price and half are below.
Manhattan prices were lower year over year, with the median price at $1.1 million, 2% less than Q1 2017. The pace of sales also slowed down – 2,557 sales closed in Q1 2018 compared to 2,871 sales in Q1 2017. Signed contracts were down as well – they were 10% lower than Q1 2017.
Brooklyn’s prices started off the year lower as well – the median sale price was at $685,000 – a 2% decrease over Q1 2017. Nonetheless, sales activity in the borough seemed to hold steady – while 3% fewer sales closed year over year, 2% more contracts were signed in Q1 2018 versus Q1 2017.
Inventory continued to move higher in Manhattan, with the number of available homes at 6,418 – a 10% increase over Q1 2017. This was primarily fueled by new resale condo and co-op listings along with slower absorption rates (especially for new development). Meanwhile, in Brooklyn, inventory shrank year over year with 14% fewer listings versus Q1 2017. However, inventory did increase versus the previous quarter by 5%, indicating that more sellers may be game for putting their homes on the market.
Lower prices and fewer sales seem to support the narrative that Manhattan’s overall sales market is finally cooling off. But what’s up for debate is how much more it’s likely to soften. Less activity in the previous quarter might have been due to various outside factors such as tax reform and stock market fluctuations. There also might have been a delay on the part of sellers and their brokers to “find the market” – i.e. figuring out what’s an appropriate price for a property given prevailing market conditions. Some sellers were quick to make this correction, others less so. Q2 2018 will be very telling, since the spring sales season is typically the strongest.
Smaller apartments are continuing to move at a faster clip versus their larger counterparts. But this was most likely due to lower levels of inventory in these segments. This indicates that now might be a good time to sell if you’re an owner of a studio or 1 bedroom in Manhattan.
Tight inventory is keeping demand high in Brooklyn. The pause in rising prices should give buyers a little bit of relief, but they shouldn’t get too comfortable. Declines in price were primarily driven by fewer closings in more expensive new developments and more sales occurring in less expensive neighborhoods. Nonetheless, many “value” areas remain relative to Manhattan, especially further east and further south.
In Manhattan, your best bets for (relatively) affordable prices are still Upper Manhattan, the East Side and Midtown. Buyers might also want to check out the Financial District and Battery Park City, especially if they’re seeking 2 or 3 bedroom apartments.
For Brooklyn, the borough’s eastern and southern sections still have low prices relative to other areas. But prices are rising very quickly in these areas as more and more buyers seek them out due to affordability. If you’re looking in Brooklyn, no matter where you go, you must be prepared for a VERY competitive bidding process.
If you have more questions about the market or NYC real estate in general (or you know someone else who could use some assistance), feel free to contact me. I’m always happy to help!