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Sales Prices Hit Record Highs in Brooklyn and Queens as Rental Rates Cool

By Amy Zimmer | July 13, 2017 9:38am
 This two-bedroom, two-bath condo with a washer-dryer and other modern touches in a landmark brownstoen at 43 Halsey St. in Bed-Stuy is listed by Douglas Elliman for $799,000 — right around the median price for Brooklyn.
This two-bedroom, two-bath condo with a washer-dryer and other modern touches in a landmark brownstoen at 43 Halsey St. in Bed-Stuy is listed by Douglas Elliman for $799,000 — right around the median price for Brooklyn.
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Douglas Elliman

BROOKLYN — The sales price of homes in Brooklyn and Queens continues to skyrocket, with plenty of options for renting in those boroughs, as well as in Manhattan — though rents remain high despite a cooling market, new statistics show.

Record high sales prices were set in Brooklyn and Queens last quarter, according to a report on second quarter data released Thursday from Douglas Elliman.

Brooklyn’s median sales price reached $795,000, jumping more than 20 percent from the same time a year ago, the report found.

The median price in Queens was $510,000, rising nearly 10 percent from the year before as the borough saw a “spillover” effect from Brooklyn’s hot market, pushing its prices up, too.

“Brooklyn has become the new Manhattan, while Queens has become the new Brooklyn,” said Steven James, CEO, New York City, Douglas Elliman. "It's like falling dominoes."

It's also why there's been a surge in interest in towns in Westchester County, and more house hunters looking at Riverdale in The Bronx, he noted.

While Manhattan's sales market is seeing price dips as units spend a longer time on the market, that trend has not yet hit Brooklyn, where more than 23 percent of all sales went for more than the listed price — at an average 3.8 percent more, according to Elliman report author Jonathan Miller.

He echoed that what’s happening now in Queens “shows how much Brooklyn is growing to have this kind of impact on an entire borough next door,” but he did not expect the price growth to continue skyrocketing.

“In many ways what’s happening in Brooklyn and Queens is what’s happening in suburban America: chronic inventory shortage and rapidly rising prices,” he said. “At some point it has to level off.”

But many expect the growth to continue, at least for a bit.

In the hot areas of Brownstone Brooklyn — including Brooklyn Heights, Carroll Gardens and Park Slope — as well and North Brooklyn’s Greenpoint and Williamsburg, median sales prices jumped 9.6 percent from the same time a year ago, to $1.25 million, according to a report from Ideal Properties. The average sales price spiked more than 21 percent, to $1.687 million.

"We believe that it will not be too long before we reach the $2 million average milestone,” Ideal’s Aleksandra Scepanovic said.

Her firm noted that 49 percent of sales in those neighborhoods in the second quarter went for above the asking price. At the same time, however, 43 percent sold at a discount from the listed price.

Meanwhile, rental prices have not budged too much from the same time a year ago, as new developments add units and inventory expands, data shows. Additionally, concessions like a free month’s rent or the landlord paying the broker’s fee remain popular.

A sales market going up while the rental market goes down is more “traditional” than what the city has seen over the past couple of years, with both markets rising, Miller noted.

When taking concessions into account and looking at the net effective rent, Brooklyn’s median rent dropped 1.6 percent to $2,813 a month; Manhattan’s median dipped 0.1 percent to $3,410 a month; and in the booming northwest area of Queens — which marks the only part of the borough’s rental market covered by the Elliman report — the monthly median edged up 2.5 percent to $2,822.

In Queens, more than 38 percent of the rental transactions included some sort of concession, four times as much as the roughly 9 percent of deals with concessions a year ago. More than 17 percent of the deals in Brooklyn had concessions, nearly triple the 6 percent from the same time a year ago. And in Manhattan, nearly 24 percent of deals involved concessions, up from about 10 percent.

Concessions may stay at these high levels, but Miller does not expect the use of them will continue on an upward trajectory.

Overall, rental price declines have been buffered by the fact that housing stock in the city is more high-end than ever, as luxury rentals with sleek finishes and lots of amenities continue to hit the market, he noted.

“The housing stock has been heavily upgraded,” he said. “It’s not just that prices have increased, it’s that the types of rents they command is higher, and that has tempered the [price] decline in the aggregate.”