While Manhattan’s real estate market continued to reel in August, Brooklyn had a near-record number of contract signings, spurred by bargain hunting New Yorkers and pent-up demand from months under quarantine.
There were 735 homes in Brooklyn that went into contract in August, a 38.7 percent increase from the same month last year, according to a new report from the real estate listings company StreetEasy. Contract signings were down 6 percent in Manhattan, and 4.3 percent in Queens in the same period. Pending sales data were not available for the Bronx and Staten Island.
The large jump in Brooklyn contract signings marks the first time that a borough has recorded year-over-year sales growth since February, before Covid-19 froze the market. The only time more contracts were signed in the borough was March 2019, when 748 deals were entered, said Nancy Wu, an economist for StreetEasy.
“It shows us that even in a pandemic, there are people interested in investing in the city long term,” Ms. Wu said, and Brooklyn has been the most popular destination.
A top priority for buyers was affordability — at least relative to Manhattan’s stubbornly high prices. Contract signings for the bottom fifth of listings in Brooklyn, where the median price was $253,000, doubled in August, to 134 deals from 67 in the same period last year, the biggest jump of any price tier.
But demand was stronger or held steady across all price points, suggesting there were other factors driving sales. The top fifth of the Brooklyn market, with a median price of $1.6 million, had 147 signings, virtually unchanged from the same period a year ago. And the surge in sales was not only in affluent areas, like Downtown Brooklyn, but also in more affordable neighborhoods including Bay Ridge and Flatbush.
At least some of the sales are attributable to pent-up demand, after the coronavirus essentially banned in-person apartment showings from mid-March through late June. But the disproportionate rebound in Brooklyn and, to a lesser extent, Queens, suggests that buyers are also adjusting priorities.
“Anything with outdoor space is flying, and renovated townhouses that are priced well are going into bidding wars,” Melissa Leifer, an agent with Keller Williams NYC, said about the recovering Brooklyn market. About half of her buyers already live in the borough, while the other half are leaving homes in Manhattan, often with complaints of high maintenance costs, smaller apartments and a lack of green space.
Still, a rebound is in its early days, after months of damage wrought by the virus. From January to the end of August, there were 3,467 contracts signed in Brooklyn, down from 4,813 in the same period last year, a roughly 30 percent drop.
Growing interest in the boroughs beyond Manhattan could become part of the lasting legacy of the pandemic, said Ms. Wu, who predicts that the prevalence of work-from-home arrangements will change the calculus for buyers who once paid a premium for Midtown proximity.
The shift is already underway. There were 10,639 units listed for sale in Manhattan last month, a 24 percent jump from the same period last year, and the highest total inventory in more than a decade, Ms. Wu said.
While a glut of luxury inventory piles up, there remains a chronic shortage of affordable housing for sale in the five boroughs, and the demand is driving up prices. From March 1 to Sept. 22, 66 percent of homes in the Bronx, the most affordable borough, sold at or above asking price, the highest share in the city. Homes there had a median asking price of $430,500, according to StreetEasy.
All your Asset management needs with Global Asset Management Korea Magazine