After rebounding from the lows of 2020, the Brooklyn market had been setting quarterly records for median price since the end of 2020. The market fell short last quarter, triggered by escalating mortgage rates, inflation, and a less-than-stellar year on Wall Street.
Quarterly deal volume is down across all market segments. Signed contracts for the Fall season have been off of the year's high setback in April. Listing discounts have been steadily increasing from the spring months when there was little negotiability for buyers. Last month, median price cuts off of original asking prices reached 3.8% (UrbanDigs).
While inventory levels increased between the 2nd and 3rd quarters, the fall market has been experiencing low levels of new inventory. The scarcity of active listings is keeping the Brooklyn market in neutral territory, favoring neither buyers nor sellers. Sellers are not rushing to the market and will wait for more favorable market conditions to get their price.
The best-performing segment is the single- and multi-family townhouse market with median sale prices up 11.8% from a year ago and 7% from the 2nd quarter. However, a decrease in signed contract activity last quarter indicates increasing market pressure on the townhouse market as well. Like Manhattan, the Brooklyn market is in reset mode with deal volume regressing back towards historical norms. It is expected the rest of the Brooklyn market will be more muted than Manhattan, which is currently in a buyer's market.
Down markets always provide opportunities for buyers and investors, amplifying the importance of working with knowledgeable agents who can provide real-time data and analysis. While prices may not drop precipitously, buyers will find themselves in a less competitive market with a chance to negotiate prices and favorable terms. We can expect this scenario to continue until inflation stabilizes and the Federal Reserve takes corresponding action.
