Photo: Robert Clark
Big-name neighborhoods like Williamsburg and Long Island City (LIC) may cost the most to call home, but migration into the outer-markets of the boroughs is what’s setting prices.
The largest overall price gains recorded in Queens and Brooklyn during the third quarter were in the more affordable outer-markets, even as overall sales declined, according to a new report by New York brokerage Stribling & Associates.
“Neighborhoods that offer several transit options and a short commute to Manhattan remain desirable. However, as prices in Brooklyn’s outer markets continue to climb, we are starting to see a greater interest in parts of Queens as well,” Stribling & Associates director of data and reporting Garrett Derderian tells Livabl.
In Brooklyn, sales fell 11 percent year-over-year as inventory grew by 20 percent from last year. Overall average and median prices were up 7 percent and 2 percent, respectively compared to last year in the third quarter.
Brooklyn’s average price climbed to just over $1 million in the third quarter — setting a new record.
“Similar to Manhattan, Brooklyn saw a reduction in total sales during the third quarter and a significant increase in inventory. We expect this trend to continue through the end of the year and into the first quarter, as buyers’ options have grown considerably and there is little pressure to make a quick decision,” says Derderian.
North Brooklyn, traditionally the borough’s most expensive area, saw a slight decrease in prices as sellers contend with the impending L-train shutdown — which will drastically alter convenient commuting from these neighborhoods into Manhattan.
“We are starting to see the real effects the L-train shutdown is having on North Brooklyn pricing. Once the shutdown has occurred, we anticipate buyers will begin to look forward and prices should re-bound in the coming quarters. There are some sellers looking to offload their properties to avoid the inconvenience, but we also see buyers looking to capitalize on the reduced prices,” Says Derderian.
And while some buyers were keen to take advantage of the deals, many others expanded their home searches further south and east.
“East Brooklyn and South Brooklyn have seen tremendous growth over recent quarters. Both submarkets are outpacing North and Northwest Brooklyn in terms of a greater percentage increase in prices,” says Derderian.
Specifically, the still relatively affordable neighborhoods of Bed-Stuy and Crown Heights have piqued the interest of buyers, and heightened demand will likely start to drive up prices in the coming quarters.
Meanwhile, the story was quite similar in the Queens market.
The overall median price hit $589,500 — a new high — while the average price climbed to $646,875 in the third quarter.
And while LIC (and the entire northwestern Queens sub-market) continue to be the priciest, buyers are looking beyond the waterfront for affordable housing. Similar to the Brooklyn market, the ripple is driving up prices borough-wide — especially in areas where single-family homes comprise most of the housing stock.
Southeastern Queens recorded a median price increase of 13 percent year-over-year and an average increase of 8 percent. The sub-market’s average price per square foot also increased by 6 percent from last year — the most of any submarket in the report. Still, the area remained the least expensive based on median and average prices
But unlike Brooklyn, the inner neighborhoods of Queens haven’t seen the construction boom — yet.
“As buyers continue to seek out affordable options, we expect areas with relatively quick commutes into Manhattan that have transit access to see an increased interest. However, as the inventory level continues to rise in neighborhoods with close proximity to Manhattan, it may be a while before development ensues the outlying markets,” says Derderian.
Click here to read the entire report.