Yes, the Crazy Brooklyn Real Estate Boom Is Slowing — We’ve Got the Data

Prospect Lefferts Gardens. Photo by Barbara Eldredge

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    Yes, it’s true, the mind-boggling Brooklyn real estate boom of the last three years slowed in the fourth quarter, just as real estate agents predicted. No, not everyone will agree, but the numbers have spoken.

    It’s great news for buyers, who could use a break, and not bad for sellers either, since prices are still climbing — just not as steeply as before.

    Let’s break it down: Fewer buyers are biting

    Toward the end of last year, the word among real estate agents was that buyers weren’t biting and properties were sitting on the shelves — a notable change from the frenzy of the last three years. But were the rumors true? And if they were true, was it just a brief blip?

    In fact, there was a serious dip in deals in the second half of the fourth quarter, as shown by numbers just in from Corcoran. The main evidence for this is the number of contracts signed, not the closed sales numbers.

    (Remember: A signed contract is not the same thing as a closed sale! Pro tip: The closed-sales numbers from the end of 2015 reflect contracts signed in earlier quarters and not the last half of the fourth quarter, when agents reported a slowdown. Those deals won’t close until the first half of this year. That’s why signed contracts are such an important indicator.)

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    Brownstones on Halsey Street in Bedford Stuyvesant. Photo by Cate Corcoran

    Fewer contracts signed

    Here’s the situation in a nutshell, with numbers from Corcoran:

    • The number of contracts signed in the last quarter of 2015 decreased 11 percent vs. the same quarter the year before. So it’s not just the usual end-of-the-year slowdown.

    To put that in perspective, check out the number of contracts signed in the third quarter of 2015. There were 9 percent more contracts signed in the third quarter of 2015 than in the third quarter of 2014, according to Corcoran’s Q3 2015 report. Whoa.

    The numbers are still fabulous, just not as insane

    You’ll be interested to know that prices are still climbing — just not as quickly as they were before, reports from Corcoran, PropertyShark, and Brown Harris Stevens reveal. Here are all the deets to chew on, from Corcoran:

    • The median closed sales price for all types of homes in Brooklyn grew 9 percent in fourth quarter. (It’s now $545,000, vs. $500,000 a year earlier.)
    • The average closed sale price rose 5 percent. It now stands at $672,000 — compared to $639,000 a year earlier.
    • The average price per square foot was up 11 percent in the fourth quarter, vs. a year ago.
    • The median price per square foot jumped 14 percent, vs. the same period the previous year.
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    6th Street in Park Slope. Photo by Cate Corcoran

    Those price figures are terrific, and numbers any homeowner would be pleased to see. But it doesn’t hold a candle to the crazy acceleration Brooklyn saw in previous quarters.

    Consider the third quarter of 2015 — the median price soared 28 percent, the average price jumped 26 percent, the average price per square foot grew 21 percent, and the median price per square foot leapt 27 percent, according to Corcoran.

    What does it all mean?

    No one is saying we’re in a down market. But the slowdown in contracts signed could certainly be a harbinger of a down market to come. We’ll have to wait and see what happens in the spring.

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