Consider this: The average price of a Brooklyn property is now $788,529, a new record, and the median is an equally impressive $605,000, reflecting a 5.2 percent increase from the same period last year, according to Douglas Elliman’s second-quarter market report released today. Which is all to say that the gap between it and Manhattan continues to shrink. In fact, Williamsburg and Greenpoint (lumped together in the survey as the northern section of the borough) have surpassed Manhattan’s median price of $960,000; theirs clocks in at $1.05 million.
Of course, Manhattan’s increasingly intractable market is one of the main forces powering Brooklyn prices to similarly lofty levels. “The harder it is to get into Manhattan’s market, the more Brooklyn benefits. But it’s not that Brooklyn is that much cheaper,” says Jonathan Miller, president of appraisal firm Miller Samuel, who authored the report. “Affordability is a problem across the board … [Brooklyn] is now a bigger competitor of Manhattan than probably any other time.”
Few neighborhoods in Brooklyn have escaped buyers’ zeal. Sarah Burke, Elliman’s senior regional executive manager of sales in Brooklyn, says a two-family house in Sunset Park sold in two weeks with multiple offers. Two-bedrooms are especially coveted. “If there’s a two-bedroom priced under a million in Brooklyn, we’re seeing upwards of 100 people” visiting, she says.
This despite a 35 percent spike in inventory from last year, according to the Corcoran Group, which reports similar record-breaking trends in its survey. Frank Percesepe, Brooklyn’s regional senior vice-president at the firm, says what comes on the market is snapped up fairly quickly. “There’s not enough inventory to satisfy demand.” He recommends Kensington and also Bay Ridge for those willing to go farther afield, a strategy many buyers priced out of brownstone Brooklyn and north Brooklyn are putting to use. (Burke recommends Midwood, which has a decent supply of co-ops and condos.)
Though Queens is still much cheaper than Brooklyn — its median sales price is a relatively more approachable $385,001, up 8.5 percent from the second quarter of 2014 — that market’s warming up, too. Properties are finding buyers faster — an average of 92 days this year, down from 110 last year — and the average discount is negligible (0.4 percent). In fact, if we look at the neighborhoods where Brooklyn spillovers are going, we start to see numbers that don’t read much like Queens anymore. Take Long Island City: Its condos have a median price of $998,000 — higher than Manhattan’s overall median.
All of which makes Miller wonder if New Yorkers will be giving the suburbs another look. Though there’s been plenty of talk about the death of the suburbs, thanks to cities becoming safer and more family-friendly, take one look at real-estate values a short train ride from the city and the appeal becomes clear. For instance, the median price of a Westchester County property, per Elliman’s report for the region, is $463,000 — almost half of Manhattan’s and $142,000 less than Brooklyn. (The number of transactions this past quarter, in fact, jumped 5.5 percent from 2014.)
Single-family homes are still cheaper in Westchester than you’d find in the city, with a median of $650,000. (A single-family brownstone in northwest Brooklyn, by comparison, goes for a median of $2.7 million.) “Everyone wrote off the suburbs, but NYC has become a victim of its own popularity,” says Miller. “If this affordable housing challenge the city has faced doesn’t get better … the suburbs become another option. I don’t want to write off the city and say it’s the end, but as prices rise, the outlying markets become the next alternative.”