Brooklyn Sees Buying Frenzy Despite Broader Slowdown

Rhea-AI Summary

In August, Brooklyn witnessed a significant surge in home sales, with pending contracts up 38.7% year-over-year to 735 homes, surpassing last year by 205 homes. This contrasts with declines in Manhattan and Queens, where sales fell by 6.0% and 4.3%, respectively. The surge is notable across all price tiers in Brooklyn, especially in lower-priced neighborhoods. However, the luxury segment saw a slight decrease. Meanwhile, inventory in Brooklyn rose to 5,830 homes, marking the highest levels since October 2019.

Positive

• Pending sales in Brooklyn increased 38.7% year-over-year.
• Brooklyn had 735 homes go into contract, 205 more than last year.
• Sales increased across nearly all price tiers, with the lowest tier seeing a 100% increase.
• The Prospect Park submarket saw a 117% increase in pending sales.

Negative

• Pending sales in Manhattan and Queens declined by 6.0% and 4.3%, respectively.
• The luxury tier in Brooklyn experienced a decrease in pending sales of 0.7%.
• Inventory in Brooklyn reached a near-record high of 5,830 homes.

NEW YORK, Sept. 24, 2020 /PRNewswire/ -- A near-record number of Brooklyn homes went into contract in August, even as pending sales in Manhattan and Queens continued to fall amid a market slowdown.

Pending sales in Brooklyn increased 38.7% from last year, with 735 homes going into contract — 205 more than last year. The only time pending sales were higher in the borough was in March 2019, when 748 homes entered contract.

Brooklyn was the clear outlier of all boroughs analyzed. In Manhattan and Queens, the number of homes that went into contract fell by 6.0% and 4.3%, respectively. Still, the surge in Brooklyn sales shows that New Yorkers continue to be interested in buying homes, and that some market segments remain highly competitive.

Pending sales in Brooklyn increased across nearly all five price tiers:

• Pending sales in Brooklyn's lowest tier, where the median price is $253,000, increased by 100% over 2019.
• Pending sales of homes in the second-highest tier, with a median price of $999,614, rose 65% over last year.
• The only tier that did not see much change was the uppermost or luxury tier, with a median of $1,613,856, where pending sales fell 0.7%.

The increase in Brooklyn sales activity was not driven solely by homes at one price point or location. Sales increased in more affordable neighborhoods like Bay Ridge and Flatbush, as well as in pricier areas like Downtown Brooklyn and Prospect Park.

In fact, the Prospect Parkⁱ submarket saw the largest year-over-year increase in pending sales in the entire city. In August, 111 homes there went into contract, more than double (117%) what the submarket saw last year. Prices also rose in Prospect Park — up 3.0% to $1,295,000, in the largest year-over-year jump in the borough.

"The striking surge in new deals in Brooklyn is the one of the first optimistic indicators for the city's sales market, and suggests that contrary to popular belief, many are making the commitment to live in the city for the long term," says StreetEasy Economist Nancy Wu.

"Manhattan has been much slower to bounce back — which indicates that buyers looking to take advantage of the low mortgage rates and stay in the city are prioritizing space and affordability over living close to their offices," Wu says. "All else equal, Brooklyn homes provide more bang for a homebuyer's buck than Manhattan."

See below for additional market trends across Manhattan, Brooklyn, and Queens.

Manhattan Had the Most Inventory in Over a Decade

Total sales inventory in Manhattan rose 24% over last year, with 10,639 homes on the market — the highest number in more than a decade. While supply increased, prices dropped, and so did the number of homes that went into contract.

The StreetEasy Manhattan Price Indexⁱⁱ fell 4.5% to $1,395,000, its lowest level since July 2014. Even with prices dropping, the number of homes entering contract was still down 6.0% from last year.

Brooklyn Prices Stayed Flat as Inventory Rose

The StreetEasy Brooklyn Price Index stayed flat compared to last year at $956,900. Prices did drop in North Brooklynⁱⁱⁱ, the borough's most expensive submarket, by 3.9% to $1,410,000.

Sales inventory in the borough was at near-record high levels with 5,830 homes on the market — an increase of 6.6% compared to last year. Inventory had not been as high since October 2019.

Prices Rose in Queens' Most Expensive Areas

Prices rose in Northwest^iv and Northeast^v Queens, the borough's two most expensive submarkets, by 3.5% and 3.4% respectively. However, the StreetEasy Queens Price Index remained flat at $660,000.

Sales inventory continued to linger in these expensive areas, — particularly in Northwest Queens, where inventory was up 24.7% year-over-year, to a record high of 601 available homes. The number of homes that entered contract ticked up from the lows seen earlier this spring, but was still down 4.3% compared to last year.

View all StreetEasy Market Reports for Manhattan, Brooklyn, and Queens, with additional neighborhood data and graphics. Definitions of StreetEasy's metrics and monthly data from each report can be explored and downloaded via the StreetEasy Data Dashboard.

About StreetEasy

StreetEasy is reimagining the way people buy, sell, and rent homes in New York City and New Jersey. Used more than any other local real estate platform, StreetEasy's website and mobile apps provide vetted and verified listings, plus intuitive search tools and data-driven guides to help people unlock the opportunity of living here. Consumers and real estate professionals can stay up-to-date on the latest real estate trends through StreetEasy's Market Reports and explore and download market data for free on the StreetEasy Data Dashboard. Launched in 2006 and based in NoMad, Manhattan, StreetEasy is owned and operated by Zillow Group (NASDAQ: Z and ZG) and is a registered trademark of Zillow, Inc.

ⁱ The Prospect Park submarket includes Park Slope, Prospect Heights, Prospect Lefferts Gardens, Prospect Park South and Windsor Terrace.
ⁱⁱ The StreetEasy Price Indices track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2007 in Brooklyn and Queens. Given this methodology, each index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Levels of the StreetEasy Price Indices reflect average values of homes on the market. Data on the sale of homes is sourced from the New York City Department of Finance. Full methodology here.
ⁱⁱⁱ The North Brooklyn submarket includes Greenpoint and Williamsburg.
^iv The Northwest Queens submarket includes Astoria, Long Island City and Sunnyside.
^v The Northeast Queens submarket includes Auburndale, Bayside, Bellerose, Flushing, Kew Gardens, Little Neck and Whitestone.

 

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SOURCE StreetEasy

FAQ

What was the increase in pending home sales in Brooklyn in August 2020?

Pending sales in Brooklyn increased by 38.7% year-over-year in August 2020.

How many homes went into contract in Brooklyn in August 2020?

In August 2020, 735 homes went into contract in Brooklyn.

What happened to pending sales in Manhattan and Queens?

Pending sales in Manhattan and Queens fell by 6.0% and 4.3%, respectively.

Which Brooklyn submarket had the largest increase in sales?

The Prospect Park submarket saw the largest year-over-year increase in pending sales, rising by 117%.

What is the current inventory level of homes in Brooklyn?

Inventory in Brooklyn rose to 5,830 homes, the highest level since October 2019.