2Q Brooklyn Report Overview

In the second quarter of 2024, Brooklyn's real estate market exhibited mixed signals. On the positive side, closings, sales volume, inventory, and pricing all saw increases compared to a year ago. However, these gains were tempered by a decline in signed contracts and longer marketing times, driven by high mortgage rates, rising prices, and tight supply in the borough's most desirable areas. Despite these challenges, the market shows more positive than negative indicators, suggesting that Brooklyn is on a slow path to recovery.

The number of closings in the second quarter of 2024 rose for the second consecutive quarter, marking the first time this has happened since early 2022. Closings were up 1% year-over-year, with approximately 1,400 sales, and robust price gains pushed sales volume up 11% annually to $1.6 billion. However, affordability challenges and limited supply in prime residential zones led to a 7% annual decline in signed contracts.

Supply remains a critical factor in Brooklyn's market health. After ten consecutive quarters of double-digit annual declines, inventory finally increased in the second quarter of 2024, rising 33% quarter-over-quarter and 15% year-over-year to around 1,900 units. This increase in inventory was widespread, with active listings up across all price segments and nearly all submarkets. However, similar to Manhattan, the growth in listings was confined to the resale market, as new development inventory continues to dwindle due to fewer properties being brought to market.

Brooklyn also saw price increases across the board for the second consecutive quarter, contrasting with declines in Manhattan. In the second quarter of 2024, price sensitivity and higher mortgage rates suppressed activity in lower-priced neighborhoods and properties under $1M. Yet, strong resale condo sales and a surge in new development deliveries in prime submarkets drove the median price up 15% and the average price per square foot up 4%, reaching record highs of $883K and $1,147, respectively.

Brooklyn continues to be an exceptionally desirable and competitive market, as evidenced by the gains in closings, sales volume, and pricing in the second quarter of 2024. While contract activity has declined compared to 2023, this appears to be a temporary dip in demand due to higher mortgage rates and low supply. With pent-up demand building, there is optimism that the third quarter of 2024 will continue to show signs of a genuine Brooklyn rebound.

Key Takeaways from the Quarterly Report:

• Brooklyn exhibited mixed signals in Second Quarter 2024, yet with more positive signs than negative indicating a slow path of improvement. Closings, sales volume, inventory & pricing increased annually, while signed contracts and days on market declined during the same time period under the weight of high mortgage rates and tight supply in the most sought after areas in the borough. 

• Supply remains a key factor impacting the health of the Brooklyn market, and in the second quarter of 2024, it received a much needed reprieve as there were approximately 1,900 listings – the highest number of active listings in the borough since Third Quarter 2022. After ten consecutive quarters of annual declines, listed inventory was up 15% annually and 33% quarter-over-quarter.

• Brooklyn prices increased across the board for the second consecutive quarter. With suppressed activity in the low end of the Brooklyn market, and a higher market share of sales over $1M, median price hit a new record high of $883K, a 15% increase over last year.