The real estate market in Brooklyn is moving sideways

The real estate market in Brooklyn has been called sclerotic, but it is neither crashing nor booming, according to third quarter reports released today. In fact, the numbers mimic the pre-Covid market, although conditions have changed.

Rising interest rates and the resulting shortage of inventory caused the number of sales to plummet compared to the go-go figures of 2022. A report by real estate firm Corcoran found silver linings in the numbers, noting that volume was on par with pre-Covid conditions.

"Brooklyn sellers are reluctant to give up their low rates, and buyers are reluctant to close," Corcoran VP General Sales Michael Sorrentino said in a prepared statement. Also, "strong sales of new high-end developments" helped boost average prices and price per square foot, according to the press release.

The number of sales and inventory in the quarter decreased significantly. There were 2,592 homes for sale in Brooklyn during the third quarter, a 17.5% dive compared to the same period last year, according to a report by Miller Samuel for Douglas Elliman. The number of sales was 2,632, a drop of 25.7 percent compared to the same period last year.

Across the board, prices for all residential property types sold in the quarter in Brooklyn were flat. The average sales price was $1,222,627, down 0.1% from last year. The median sales price reached $950,000, down 0.9% from the third quarter of 2022, according to Douglas Elliman.

Looking at sales prices by property type, apartment prices - especially in new developments - have increased, while prices for cooperatives and one- and three-family homes have decreased. The average sales price for apartments in a new development was $1,431,027, a jump of 18.6 percent compared to the same period last year. The average sales price of resale condos reached $1,234,905, up 3.6 percent from the third quarter of 2022. Meanwhile, co-ops were down 8 percent from a year earlier, weighing in at an average sales price of $686,609. Single- and three-family homes in the district traded for an average price of $1,419,161, a 6.4% decrease from last year's numbers, the Elliman report said.

Average price per square meter – a more reliable measure but not available for co-ops – reinforced these trends. The average price per square meter for all apartments (new and resale) jumped by 14.9% to $1,189 in the quarter compared to the previous year. The average price per square foot for one- and three-family homes reached $635, down 15.3% compared to the third quarter of 2022, Douglas Elliman said.

The numbers were similar across the region, even in the brownstone-heavy Northwest, where the average price per square foot for one- or three-family homes fell 19.3 percent this year to $1,292, according to the same report.

"The housing markets across the country are still challenged by the highest mortgage rates in over 20 years, a situation that is unlikely to change soon," said Brown Harris Stevens CEO Bess Friedman in the company's market report. However, demand for apartments in Brooklyn remains strong, as evidenced by the stability of prices over the past year."