Based on the latest findings from Douglas Elliman’s second quarter 2018 residential market reports for Brooklyn and Queens, it seems like a tale of two boroughs: one that has long been the arbiter of hip, but is now apparently cooling off; while the other, which has been underappreciated compared to its more popular neighbor, is currently on a hot streak.
Jonathan Miller, President of Miller Samuel, Inc., which produced the Elliman reports, says of the surveys: “The Brooklyn and Queens housing markets, likely in response to rising mortgage rates and uncertainty related to the ultimate impact of the new federal tax law, saw number of sales slide and inventory expand. Brooklyn housing price slid from previous records as Queens continued to set new records.”
Brooklyn has been the Cinderella story of New York real estate for at least the past two decades. Once the home to working-class New Yorkers with family roots going back several generations, it became the promised land for young hipsters and Generation X couples priced out of Manhattan in the late 1990s and early 2000s.
Now that momentum appears to have slowed down. “While the Brooklyn housing market continued its blistering pace with near record prices and chronically low inventory,” said the report, “the intensity of the market eased with fewer sales and more inventory.” The overall median price for the borough in the second quarter dipped 1.9 percent to $780,000 from the same period last year -- the first decline after 22 consecutive increases.
The dip in the Brooklyn market was more pronounced in the condominium sector than among co-ops. Overall, median sales price fell in the condominium market by 4.4 percent to $860,000 since second quarter 2017. The bulk of that decline occurred in the second half of 2017, as the percentage fell only 0.2 percent in median price from the first to second quarter 2018. That may indicate that the market has flattened out, or is beginning to. The number of sales dropped by 11.9 percent to 823 from the same period last year; however, the number of sales rose by 14 percent from the first to second quarter of 2018, also indicating that the worst may be over.