Manhattan vs. Brooklyn Q4 2018 – It’s Officially a Buyer’s Market!

It’s time to take a look at Corcoran’s Quarterly Reports for Manhattan and Brooklyn for Q4 2018. If you want to check out the full reports, you can click here for Manhattan and click here for Brooklyn.

It’s officially a buyer’s market, but it’s not just in Manhattan, as Brooklyn now has clearer signs of weakness in some places.

In Manhattan, contract signings decreased 12% year over year; closed sales decreased 7% year over year; and inventory continued to climb – up 10% year over year. The average price per square foot was actually up 3% year over year, but that was primarily due to some high end sales around Central Park. Absent these sales, it would have dropped.

Buyers are certainly using their upper hand – days on market for listings increased 5% versus last year.

While Brooklyn hasn’t seen the same kinds of declines that Manhattan has, the declines are there nonetheless. The median price for the borough was down 3% to $658,000.  Contracts signed decreased 2% versus Q4 2017 and closed sales were down 6% year over year.

But like the previous quarter, some areas south of Prospect Park saw continued growth. For example, South Brooklyn had a 13% year over year increase in sales and prices increased a stellar 15% versus Q4 2017.

What’s Probably Next?

The next couple of months are likely to see prices continue to slide a bit in both Manhattan and Brooklyn, as sellers try to “find the market” (i.e. figure out where they need to price their homes in order to get them sold). But there are anecdotal signs that more buyers are coming back into the market. And as the impact of tax reform becomes clearer, buyers will probably have a better idea of what makes sense for them to buy, given the changes in tax deductibility.

The Brooklyn market now has a bit more uncertainty thanks to Cuomo’s halt of the L train shutdown. It’s possible Williamsburg and Greenpoint will see a “pop” in sales in Q1 2019. But it’s not likely to be a very significant one until more details about an alternative plan for the L train emerges.

Overall, the next couple of months are shaping up to offer an incredible opportunity for buyers in Manhattan and Brooklyn, especially first timers. If you want to position yourself to take advantage of it, but you’re not quite sure if you’re ready, then I recommend checking out my First Time Buyer Bootcamp!  Click here to learn more.