Manhattan vs Brooklyn Q3 2018 – It’s Not Your Imagination, Prices ARE Coming Down!
It’s October and that means it’s time to take a look at Corcoran’s Quarterly Reports for Manhattan and Brooklyn. If you want to check out the full reports, you can click here for Manhattan and click here for Brooklyn. Click on the infographics below to expand.
It’s becoming clearer and clearer that the market has shifted to a buyer’s market in Manhattan. All the factors are there – contract signings were down 12% year over year; closed sales were down 10% year over year; average price per square foot was down 3% year over year; and inventory is up a whopping 23% year over year. It’s been quite a while since buyers have enjoyed this much opportunity, and it’s clear they’re taking advantage of it – days on market for listings was up 9% versus Q3 2017 which shows that they don’t feel as much pressure to make a quick decision on listings.
It’s not all bad news for sellers in Manhattan though, especially if you’re the owner of a studio or 1 bedroom. Listings under $1 million sold at a faster rate than all other price ranges, and the $1 million to $2 million range still saw healthy activity. The key for sellers nowadays is to be able to accurately read the market – it’s now more critical to be sure you start at the right list price.
Brooklyn is a bit of a different story.
There are signs that the market is cooling off, especially in northern and western Brooklyn, where prices were getting to some eye-popping heights. Borough wide, contracts signed were down 8% versus Q3 2017 and closed sales were down 7% year over year. The median price was also down slightly – 3% less than Q3 2017.
However, some parts of the borough – especially south and east of Prospect Park – saw incredible price growth. Take the Kensington, Windsor Terrace, Ditmas Park, Flatbush and Prospect Park area, for example – the average price per square foot was up 16% year over year and the median price was up an astonishing 27%! Even so, the average price per square foot was still a significant discount compared to areas like Carroll Gardens, Boerum Hill and Red Hook – the latter had an average price per square foot of $1,245 versus $745 per square foot for the former.
So while some parts of Brooklyn are seeing a slight downward trend, other areas are seeing a boost in prices, resulting in the borough’s market effectively leveling off. This isn’t such terrible news for sellers – a well priced property will still get a solid price. But it’s good news for would be Brooklyn buyers for whom prices seemed to be on an unstoppable breakneck pace upwards.
What’s Probably Next?
Prices are expected to continue to slide a bit in Manhattan, as more sellers have to adjust to the new realities of the current market. Additionally, demand will probably remain muted due to lingering uncertainty surrounding tax reform.
In Brooklyn, the current pattern is likely to continue – more expensive parts will probably see some modest declines while more affordable areas are likely to increase in popularity. This will probably cause the overall median price to trend downward, but the borough’s real estate market will likely continue at a healthy pace through the end of 2018.
Got more questions about the market? Feel free to contact me!
P.S. Are you (or someone you know) thinking about buying your first home, but you’re not sure where or how to start? Then check out my First Time Buyer Bootcamp to help you figure out if home ownership is right for you! Click here to learn more.