NEW YORK CITY — Don’t expect another year of record price growth for Manhattan and Brooklyn real estate as many buyers have reached their limits, real estate experts said.
After two years of surging sales prices, growth is expected to slow significantly in 2016, according to a report released Friday from real estate search site StreetEasy.
Prices in Manhattan are expected to inch up a mere 0.8 percent this year, according to the report. Brooklyn is expected to slow, too, with prices climbing 4 percent — which is half of last year’s rate.
"At some point, buyers reach their limit," StreetEasy data scientist Alan Lightfeldt said.
He characterized the market this coming year as "a period of very slow but positive growth as the market cools from a boil to a simmer."
Others agreed.
For the first time in a few years, leverage is shifting “toward the center,” said Noah Rosenblatt, founder of UrbanDigs, a site that analyzes the Manhattan market.
“By no means will buyers have a critical advantage,” he said. “But sellers no longer have an extreme advantage.”
In 2015, low inventory kept the pressure on prices, the StreetEasy report noted.
The sales market seemed to reach new highs every quarter, including the last quarter of the year when the Manhattan median price hit $1.002 million — representing a 7.1 percent jump from the year before and the first time the median crossed the million-dollar threshold, according to the report.
Brooklyn’s median price for re-sales jumped 8.3 percent to a record $537,193.
Despite 2015’s momentum, however, many signs point to a slowdown.
"This occurred first in the Manhattan luxury market, where prices peaked in February 2015 and have since seen 11 consecutive months of decline," Lightfeldt said. "There are strong signs that supply in the luxury segment exceeds demand heading into 2016.”
Many brokers, however, noted that competition for homes less than $2 million in many neighborhoods may still be tight, and the popularity of areas with lower prices will likely see continued price growth.
Case in point: Upper Manhattan (which spans from Harlem to Inwood and Washington Heights) and East Brooklyn (which includes Bedford-Stuyvesant, Bushwick, Brownsville, Crown Heights and East New York) saw double-digit price growth in the fourth quarter of 2015.
The median price in Upper Manhattan reached $641,882, a nearly 15 percent spike from the year before, according to the StreetEasy report. East Brooklyn’s median price was $464,285, up more than 18 percent from the year before.
“The world is full of normal people, who want to live someplace,” Frederick Peters of Warburg Realty said. “At the moment, it seems a little less full of multinational oligarchs who want to spend $50 million for a pied-a-terre in Manhattan.”
And there’s still room for prices to rise in Brooklyn, he added.
“We’ll continue to see the creeping fingers of Manhattanization or gentrification — call it what you will — going deeper and deeper into the borough and starting to capitalize on this very beautiful housing stock that is everywhere,” he said.
