Unlike Manhattan, Brooklyn and Queens did not see a record number of pre-fiscal cliff sales happen at the end of 2012. In fact, both boroughs saw a decrease in sales, according to the Elliman market reports prepared by real estate guru Jonathan Miller. “Sales fell from year ago levels because buyers had less to choose from,” explains Miller. Brooklyn had just 4,685 units on the market, the lowest level of inventory in four years (since Miller began tracking), and Queens had the lowest fourth quarter inventory in seven years. Why? “Credit remains tight and many have low or negative equity that keep sellers from selling because they may not qualify for mortgages as a buyer,” says Miller. “In addition, would be sellers don’t see something to buy and they won’t sell until they do. But they’re not panicked so they simply wait until something comes on the market.”
In Brooklyn, the median sales price jumped nearly 13 percent to $512,500, with the average jumping even more, to $613,650. The Corcoran reports notes that this was the third consecutive quarter with the average sale topping $600,000. Brooklyn’s luxury market showed price gains as well. The median rose 16.8 percent to $1,397,000, and these luxury homes are getting picked up quicker than before. The average time on the market fell by 35 days.
Queens also saw significant price increases, where the median rose 13.7 percent to $390,000 and the average jump 9.4 percent to $432,503. Miller notes that much of this price increase occurred at the end of the year. Room for negotiating prices tightened, as units are spending 10 less days on the market and the average discount fell to just over 6 percent, down from 7.2 percent.
So does this all mean that the market is improving? Not quite, says Miller. “Tight credit, record low mortgage rates and low inventory are why we saw all the price indicators rise above year ago levels. That doesn’t mean it’s a trend or we will double-digit gains in the near future, but it does indicate that the housing market is showing better results than in prior quarters. I think of it as some sort of artificial recovery before an actual recovery.”