Home sales in Brooklyn jumped the most in seven years while the supply of listings hovered near a record low, pushing buyers toward bidding wars in the New York borough.
Purchases of condos, co-ops and one- to three-family homes jumped 46% in the first quarter from a year earlier to 2,800 deals, according to a report Thursday by appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. The number of homes on the market at the end of March fell 20% to 2,290, the second-fewest since the firms started tracking the data in 2008. The lowest period for listings was the previous quarter.
“What it boils down to is this: I’m starving for inventory,” said Frank Percesepe, who oversees Brooklyn sales for brokerage Corcoran Group, which also released a report on Thursday showing a drop in listings. “We are hurting for inventory and people are buying up what’s there.”
Brooklyn, the city’s most populous borough, and neighboring Queens are setting themselves apart from the sales market in Manhattan, where a growing supply of listings is giving buyers more leverage to negotiate and walk away. Shoppers searching for homes at relative discounts to Manhattan have less to choose from in the outer boroughs, where the post-recession construction boom focused largely on rentals, with a few select luxury-condo developments.
Buyers eager to strike a deal in Brooklyn were willing to overpay — and the lower the price, the more likely people were to bid it up. While 22% of all sales in the quarter were above the asking price, half of studio purchases were for more than the seller sought, Miller Samuel and Douglas Elliman said. For co-op apartments, which tend to be less costly than condos and houses, the share was 37%.
It would take just 2.5 months to sell all of Brooklyn’s existing inventory at the current pace of deals, the fastest rate in nine years, according to the firms.
“People realize there’s not going to be a glut of inventory and say, ‘Maybe let’s get in before prices go up more,'” said Sarah Burke, a Douglas Elliman managing director who oversees sales in Brooklyn. “It does make people pull the trigger.”
Corcoran broker Mark Martov said some open houses he’s held in recent months for listings in the Bedford-Stuyvesant and Bushwick neighborhoods have each drawn more than 70 attendees. On one deal for a multifamily house in Bushwick, the successful bidders had to offer $100,000 above the asking price and waive the mortgage contingency, meaning they were committing to the purchase regardless of whether they could obtain financing, he said.
“At open houses, people are pulling me over to the side and saying, ‘How do we make this deal happen? What do we have to do?'” Martov said.
The median sale price in the borough, which has been routinely setting records, rose to a new high in the quarter, propelled in part by completed deals in pricey new developments where contracts were signed years ago, such as Williamsburg’s Oosten and 51 Jay St. in Dumbo. Miller Samuel and Douglas Elliman reported the Brooklyn median climbed 16% from a year earlier to $770,000, while Corcoran cited a 30% jump to a median of $750,000.
A separate report by brokerage Brown Harris Stevens showed the median price of a one- to four-family home in Brooklyn rose 6.7% to a record $870,000. The median for co-ops and condos climbed 18% to $670,000, also an all-time high, spurred in part by closings in new developments.
In Queens, newly built apartments accounted for 24% of all condo sales in the quarter, Miller Samuel and Douglas Elliman said. That helped push the median price up 21% from a year earlier to $485,000. Inventory fell 4% to 3,986 listings.