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Home Prices Rise in Brooklyn and Queens While Rents Drop, Figures Show

By Amy Zimmer | October 12, 2017 7:53am
 Sheephead Bay's the Vue, is one of the new condos in Brooklyn that had a lot of closings in the third quarter.
Sheephead Bay's the Vue, is one of the new condos in Brooklyn that had a lot of closings in the third quarter.
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Corcoran Group

BROOKLYN — Home sales prices in Brooklyn continued to rise in the past quarter, while rents dipped, according to market reports from top brokerage firms.

Queens followed suit on both fronts.

Brooklyn's median sales price — representing the midpoint of the market — rose 7.5 percent over the past 12 months to $790,000, according to a report released Tuesday from Douglas Elliman.

It was the 20th consecutive quarter of year-over-year price growth.

Meanwhile, the median price for rentals in the borough, when taking concessions like a free month's rent into account, dipped 5.6 percent to $2,757 a month.

The borough's focus on new high-end rentals — where a glut is forcing developers to give incentives to keep prices aloft — has resulted in "softness" in that market, explained Elliman report author Jonathan Miller.

While the borough is seeing new condo development, it's much less than on the rental side, so the sales inventory remains more constrained.

"I wouldn't say condos are in short supply, but there's not a flood," Miller said. “The only time a condo doesn’t sell quickly is because the sales price is too high, not because of the demand."

Nearly a quarter of the sales in Brooklyn sold for above the asking price. That was double the rate in Manhattan, he noted.

“It just shows you the intensity in Brooklyn,” Miller said. “There’s more room for price growth as long as sales remain heavy.”

READ MORE: Step Inside Brooklyn's Sprawling New Mansions

The number of deals in Brooklyn jumped 31 percent in the third quarter compared to the same time a year ago even though there were 13 percent fewer listings overall, found a report from Corcoran.

"This quarter the insatiable demand for home ownership in Brooklyn was confirmed," the report states.

New development helped prop up the borough's market, with the number of closings skyrocketing 132 percent in several fancy new large condos, such as Prospect Height’s 550 Vanderbilt, Sheepshead Bay’s Vue Condominium, 251 First St. in Park Slope and Williamsburg’s Austin Nichols House.

Williamsburg and Greenpoint led the charge, claiming more than 30 percent of the borough’s new development, followed by South Brooklyn, Corcoran found. Park Slope and Gowanus also had significantly more new development activity compared to a year ago.

Though the construction boom helped fuel the price growth, that wasn’t the only reason prices remained on an upward swing, said Garrett Derderian, Stribling’s director of data and reporting.

“Many Brooklyn areas still have a strong feeling of community when compared to Manhattan. There are not as many vacant storefronts, and, depending on the location, transportation into the city is relatively easy,” he said. “It is possible to feel a world away, but be only a couple subway stops from Manhattan.”

The Ideal Properties Group report, which focuses on Brownstone Brooklyn and North Brooklyn, found that Park Slope ranked first in sales with 22 percent of all transactions, Williamsburg came in second with 19 percent followed by Brooklyn Heights capturing 10 percent of activity.

Meanwhile, Queens continued to pick up Brooklyn’s spillover.

The median sales price in Queens hit a record $550,000, up more than 10 percent from the same time a year ago, the Elliman report found.

“Queens is joined at the hip with Brooklyn,” Miller said. “There’s a lot of pressure in Brooklyn, and in a sense [Queens] provides some relief for people seeking affordability. But in its own right, it’s setting new records.”

For rentals in the northwest region of the borough that includes Long Island City and Astoria — and is the only area the Elliman rental report covers — the median price, taking concession into account slipped 1.3 percent to $2,717 a month.