Getting Ready

Bidding wars, demand for luxury condos helped drive Brooklyn median price to another record

By Jennifer White Karp | January 13, 2022 - 12:30PM 

The Brooklyn median sales price has hit a record in six out the past seven quarters, according to the latest edition of the Elliman Report.

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Brooklyn’s hot streak continues with another record set for pricing in the most recent quarter, thanks in part to a surge in demand for luxury condos.

The median sales price in the fourth quarter of 2021 was $941,000, making this the sixth time the Brooklyn median price has hit a record in the past seven quarters, according to the latest edition of the Elliman Report for Brooklyn, Queens, and Riverdale.

Buyers were going for pricier properties: In the fourth quarter, sales of apartments priced over $1 million surged 33.3 percent compared to the fourth quarter of 2020, while sales of properties priced under $1 million were up 11 percent compared to the year-ago quarter, according to Jonathan Miller, president and CEO of real estate appraisal firm Miller Samuel and author of the report.

One-to-three family houses typically dominate sales in Brooklyn—and there were 1,457 sales of this housing type in Brooklyn, up 15.8 percent over fourth quarter 2020. However, condo sales (1,047), were up 27.1 percent over the year-ago quarter.

“Condos grew a lot faster thanks to the demand for luxury, post lockdown,” Miller says.

The emphasis on luxury sales in NYC is a recent shift. Prior to the pandemic, luxury sales were slow for a period of five years. After Covid-19 hit NYC, high-end sales rebounded as a result of lower prices and low mortgage rates and because of the heavier economic toll that lower-wage earners suffered.

Bidding wars are also helping drive prices in Brooklyn higher in the fourth quarter—they represented about one in five sales, or 21.5 percent of deals (not a record—but still elevated).

Brooklyn did not see the same leap in sales in the fourth quarter of 2021 as Manhattan largely because the market here has been more stable. Manhattan, on the other hand, has behaved like a “roller coaster,” Miller says.

The number of sales in Brooklyn was up 19.4 percent compared to the fourth quarter of 2020 while the number of sales in Manhattan was up an astonishing 86.4 percent for the same period.

In Queens during the fourth quarter, listings were taken off the market quickly and demand sent prices to new record highs. The number of listings dropped 18.5 percent and sales were up 18.7 percent.

The median sales price ($718,000) and average sales price ($768,000) set records for the third, consecutive quarter and year to date, according to the report.

The market share of bidding wars in Queens reached the second-highest level on record at 18.8 percent of deals (the record was set in the prior quarter at 19.2 percent).

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Investment buyers head to Brooklyn

The Brooklyn market report for the fourth quarter from Compass notes that luxury condos over $3 million saw a significant increase in sales. “These units are considered investment deals for buyers as similar offerings in Manhattan would cost two or three times as much,” the report says. 

Mat Gundell, an agent at Compass, says, “the past year was a record year in Brooklyn for two main reasons: High earnings and buyer confidence.

“It was a really strong year in the stock and crypto markets, and given the tight labor market, employees benefited from the competition through compensation negotiations, especially in the financial and tech industries. And when the vaccine rolled out, we saw a huge shift in buyer confidence,” he says. 

Corcoran's fourth quarter Brooklyn market report also highlights the sales records that were shattered across the borough.

Michael Sorrentino, senior vice president and general sales manager of New York at Corcoran, says, “We’re seeing the lowest inventory level in seven years…buyers continue to recognize the perks of living in the borough, and Brooklyn has quite simply never been hotter.” 

Sales in Kensington, Windsor Terrace, Ditmas Park, and Flatbush/Prospect Park South saw a “monumental” increase of 55 percent, the largest year-over-year gain in the borough, the report says.

The fourth quarter 2021 Brooklyn market report from Brown Harris Stevens notes average prices in Park Slope, South Slope, and Windsor Terrace were 18 percent higher than in the fourth quarter of 2020, and the average price in the Williamsburg and Greenpoint area was 20 percent higher than the year-ago quarter.

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Buyers seek larger apartments 

Demand for larger new apartments also helped fuel Brooklyn’s high-end market. According to Brown Harris Stevens Development Marketing’s fourth quarter report, the average Brooklyn new development contract signed size was 1,220 square feet, the largest in five years, and price-per-square-foot was $1,680, up 43 percent from both the fourth quarter of 2019 and the fourth quarter of 2020.

Stephen Kliegerman, president of Brown Harris Stevens Development Marketing, says the price per square foot for new development jumped 11 percent at contract signing from the current asking price.

Luxury prices on par with Manhattan

SERHANT also released fourth quarter reports for the Brooklyn market, new development, and Long Island City condos. The entry threshold for luxury moved higher in the last quarter to nearly $2 million, the reports note.

“We are seeing properties trade deeper in the borough at price points that were once only seen in the waterfront markets close to Manhattan,” says Garrett Derderian, director of market intelligence at SERHANT.

Luxury housing in Brooklyn used to mean brownstones, he says, but that’s no longer the case. The borough “has seen a surge of demand for luxury condos, especially in the new development space. That trend solidified in 2021.”

 

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