As the nation goes, so go Manhattan, Brooklyn, and Queens. The third quarter market report for Manhattan hit earlier this month, and now it’s the other two boroughs’ turn to impress us with how well they can stay on-trend. Inventory is falling everywhere: in the third quarter, it dropped 16.2 percent in Brooklyn (to 5,602 units, compared to 6,688 units in Q3 of 2011) and 12.2 percent in Queens (to 9,052 units). The reason for all of this falling inventory? Buyers and sellers are in a holding pattern, graph guru and Elliman report preparer Jonathan Miller explains. Sellers don’t have the equity for their next purchases, the same situation in which they found themselves a quarter ago, and they don’t want to plunge into the rental market when rents are rising. While low mortgage rates might ordinarily spur the sales market, mortgage rates are likely to stay low through 2015, taking any urgency out of the situation. The fiscal cliff approaching at the end of 2012 is the more urgent consideration at the moment, and all of these factors combined are a yellow light for sellers.
As Brooklyn and Queens have worked off excess inventory (and the absorption rate, or the amount of time it would take to sell off current inventory, is indeed the highest it’s been since the fall of Lehman), the number of sales and the prices of those sales have remained relatively stable. “Lower inventory has had the effect of firming prices,” JMillz explains. The median sales price in Brooklyn was $506,000, just 0.8 percent lower than in the third quarter of 2011. The number of sales fell 2.2 percent, to 2,171. In Queens, the median sales price fell 3.9 percent, to $370,000; the number of sales dropped 8.5 percent. Miller predicts “upward pressure on prices” in 2013 if inventory keeps falling.
We can’t let a market report go by without some neighborhood specifics. In Northwest Queen, where many of the borough’s new developments of recent years are located, prices went up 3.6 percent year-over-year, to a median of $510,000. In North Brooklyn—the Elliman report’s way of encapsulating Williamsburg and Greenpoint—the median sales price rose 5.1 percent, to $647,000. Brooklyn and Queens buyers and sellers out there, how was your third quarter?