Brooklyn’s residential co-op and condominium market ended 2018 on a less-than-positive note, a change from the more stable picture it displayed in 2017, according to Corcoran’s 2018 fourth quarter report.
“Brooklyn ended 2018 by following earlier quarters’ trends with overall sales slightly slowing but also shifting to lower-cost areas,” said the study. ”With the high prices in neighborhoods close to Manhattan compounded by tax reform and rising mortgage rates, apartment buyers continued to seek value in neighborhoods with more palatable price points; these areas had robust sales activity and further price appreciation. Overall, however, the pace at which value seeking buyers transacted was not fast enough to prop up sales compared to Fourth Quarter 2017, which was the strongest fourth quarter in the last ten years.”
The good news from the study is that despite the downturn in sales, according to Corcoran, “there were 6 percent fewer closings versus last year, activity remained in line with the five-year historical average. At just over 1,400 sales, the Fourth Quarter 2018 figure was the second highest fourth quarter in a decade. The contracts signed figure was off by just 2 percent compared to both last quarter and last year, a less severe decline in sales activity relative to Manhattan.”
While generally in line with the downward trend, median prices showed some differential between property types. Co-op resale prices slipped slightly year-over-year from fourth quarter 2017 to 2018 by 1 percent. Fourth quarter 2018 median prices, though, slipped a sizable 9 percent over third quarter 2018. This admittedly severe drop may have dragged the year into negative territory overall. Median condo resale prices cast a questioning light onto this dynamic, as they are actually in positive territory, with an 8 percent increase year over year from 2017 to 2018, and a 3 percent increase from third quarter 2018 to fourth quarter 2018. The report points to shrinking market share of sales over $1,000,000 in the co-op resale market as a major factor in this measure. Alternatively, resale prices at the high-end of the condominium market kept median price strong in 2018.
“The weakening of the market is a result of many factors,” says Peter Grazioli, a broker at Halstead’s Park Slope office. “2018 was hesitant. Buyers were slower to react. But the market had been in a constant and consistent upward flow for eight or nine years, so a small slowdown was both normal and expected. There are more people coming back into the market now. An uptake in the market was evident from third to fourth quarter in 2018.”