BROOKLYN REAL ESTATE REPORT:
Fourth QUARTER 2023

Brooklyn Real Estate Market Report: 4th Quarter 2023

In 2023, Brooklyn sales, supply and confidence were tempered by high mortgage rates, record-low inventory, pricing pressure, and world events. However, the year ended on a different note than it began. In Fourth Quarter 2023, closings fell less than earlier quarters, signed contracts improved, and days on market was on par with the stronger market of a few years ago. With mortgage rates falling and the economy on a path towards a soft landing, we hope this quarter’s results provide a cautiously constructive backdrop heading into what’s sure to be an eventful 2024.

Closed sales moderated annually for the seventh quarter in a row, which hasn’t happened since The Corcoran Group began reporting over fifteen years ago. Sales fell nearly 30% year-over-year to about 1,100 closings and $1.042B, the slowest fourth quarter since 2012. On the other hand, contracts struck a positive note this quarter, up 16% versus last quarter and 3% annually. While the comparison is to very weak quarters, this was the first time signed contracts improved annually in essentially two years.

While too early to tell if the market has truly turned a corner, the fact deal activity improved at all amid record low inventory is a testament to Brooklyn’s depth of demand and enduring appeal. In Fourth Quarter 2023, Brooklyn inventory fell for the ninth consecutive quarter, plunging 22% annually to a record low of 1,262 listings. All product types are undersupplied in Brooklyn, their inventories zapped by post-Covid demand, a very low number of new listings with sellers locked into low mortgage rates, and a sharp drop in 2023 new development launches. Low inventory may continue to impact sales figures and the Brooklyn market’s recovery in 2024.

Brooklyn price statistics in Fourth Quarter 2023 reflected inventory constraints, high mortgage rates, and buyers’ search for value. Many Brooklyn buyers ready and willing to transact turned to resale co-ops and/or locations farther east and south. As a result, median price and average price per square foot declined 3% and 8% year-over-year to $725K and $1,013, respectively. With these declines, prices are now below where they were during the red-hot market of 2021 through early 2022 but are essentially level with their five-year historical averages.

Brooklyn is still an incredibly in-demand and competitive market. Though sales fell in 2023, well-priced apartments are receiving multiple offers, day on market fell below its historical average, and pricing remains robust. As we enter 2024, we hope the forecast of lower mortgage rates, a solid economy, and some highly anticipated new developments meet a re-energized buyer and seller pool to propel an earnest rebound in of the Brooklyn market.

Key Highlights of Sales Data for 4th Quarter 2023

• Brooklyn had just under 1,100 closings in Fourth Quarter 2023, down 25% yearover-year and 48% below the fourth quarter peak in 2021.

• Closings fell 28% versus last quarter, the second-deepest third to fourth quarter seasonal decline in ten years.

• Sales volume at $1.041B fell 29% annually and 32% quarter-over-quarter. Though volume hit a three-year low, it was only slightly below the fourth quarter average of the five years preceding 2020.

• Contracts signed increased 3% year-over-year and 16% quarter-over-quarter to 864 deals. This was the first year-over-year increase in signed contracts since First Quarter 2022. Nevertheless, Fourth Quarter 2023 witnessed the fourth lowest number of contracts signed since 2014.

• Listings spent about three months on the market, essentially level with a year ago.

Inventory Data for 4th Quarter 2023

• Listed inventory fell 22% year-over-year to 1,262 listings, the lowest total of any quarter on record.

• Active listings are now down 52% versus their recent peak of 2,612 in First Quarter 2021.

• Listed inventory fell 19% versus Third Quarter 2023, similar to the quarterly drop in 2022.

• Inventory declined below $1M. Listings from $500K to $750K fell most, down 40%. In contrast, inventory rose 2% from $1M to $2M, the only price range with an annual increase.

• Inventory contracted in most areas except Williamsburg & Greenpoint and Carroll Gardens, Boerum Hill & Red Hook. In Williamsburg & Greenpoint, the jump was due largely to co-op listings, a less common product type in the area. In contrast, the increase in Carroll Gardens, Boerum Hill & Red Hook was due to new development introductions.

• Park Slope & Gowanus had the largest annual percentage decrease in inventory due to fewer sponsor listings on Fourth Avenue and limited resale listings under $1M. South Brooklyn had the largest nominal drop in active listings, down about 200 listings annually.

• Inventory fell across all unit types. Studios fell most, down 43% year-over-year. Would-be sellers, especially at the low end, have been hesitant to list given their low mortgage rates.

Brooklyn Real Estate Pricing Data for 3rd Quarter 2023

• Price statistics fell across the board versus a year ago. The market share of resale co-op sales rose year-over-year to 43%, precipitating the decline in Brooklyn price figures.

• Brooklyn median price fell 3% year-over-year to $725K due to an increased share of sales under $350K while all other price segments experienced a decreased share of sales.

• Average price fell 5% annually to $968K, the second lowest figure in nearly three years. Average price per square foot dropped 8% to $1,013. A significant drop in new development sales and the concurrent rise in resale co-op market share prompted the annual declines.

• Due to increased activity under $350K, particularly in South Brooklyn, resale co-op median price and average price per square foot fell 2% and 5%, respectively, versus a year ago.

• Resale condo median price increased 3% and average price per square foot rose 2% amid a slight uptick in the share of sales over $1M.

Neighborhoods

Williamsburg & Greenpoint

• Sales fell 40% annually. A deep drop in new development closings drove the decline, as resale condo and co-op sales both improved versus a year ago.

• The sharp new development decline was because Fourth Quarter 2022 saw the commencement of closings at 510 Driggs and 215 North 10th Street. Both buildings closed more than 80% of their units within that quarter.

• Unlike Brooklyn overall, active listings in Williamsburg & Greenpoint rose 7% due to several new development launches over the last year, such as The Huron and 171N1.

• Average days on market decreased by a week and a half versus a year ago to just over two months.

• A smaller share of closings over $2M drove resale condo median price and average price per square foot down 2% and 4%, respectively.

• With fewer sales occurring at 510 Driggs and 215 North 10th Street compared to a year ago, far fewer sales exceeded $2M, causing new development median price to decline 9%. In conjunction, fewer sales topped $1,750 per square foot, triggering new development average price per square foot to fall 16%.

Brooklyn Heights, Cobble Hill, Dumbo & Downtown

• Sales fell 13% annually. All product types experienced doubledigit annual percentage declines in closings compared to a year ago.

• Slower deal activity drove days on market up 11% annually to about three months.

• Inventory fell 24% year-over-year due to a very limited number of Fourth Quarter 2023 new listings in Brooklyn Heights and Downtown Brooklyn.

• Median price and average price per square foot each rose 6% year-over-year due largely to new development sales at Olympia Dumbo and Brooklyn Point.

Carroll Gardens, Boerum Hill & Red Hook

• Despite an annual increase in new development deliveries, Carroll Gardens, Boreum Hill & Red Hook sales fell 23% annually due to double-digit drops in resale activity.

• Due to new development introductions, Carroll Gardens, Boerum Hill & Red Hook had the largest annual increase in active listings for the third consecutive quarter.

• Median and average price per square foot figures shifted minimally versus a year ago. Median price increased 2% but average price per square foot fell 1% due to an increase in larger apartment sales compared to a year ago.

Park Slope & Gowanus

• Closings fell 54% year-over-year amid 81% fewer new development sales.

• Resale condo sales rose 20% annually due to increased activity near Fourth Avenue; it was the only product type to experience a year-over-year increase.

• Active listings fell 35% year-over-year, the greatest percentage drop of the quarter among all submarkets.

• Park Slope & Gowanus remained the most competitive market in Brooklyn, with listings spending an average of 58 days on market.

• Median price and average price per square foot fell due to the deep drop in sales over $2M and $1,200 per square foot that accompanied fewer sponsor closings.

Fort Greene, Clinton Hill & Prospect Heights

• Closings fell 20% year-over-year to just over 80 sales. Versus a year ago, new development sales fell by more than half, but condo and co-op closings improved.

• Inventory dropped 16% annually, less than Brooklyn’s overall decline of 22%.

• Days on market fell 3% year-over-year to 59, the borough’s second-lowest figure.

• Tight inventory plus a greater market shares of sales over $1M for all product types drove median price and average price per square foot figures up versus last year.

Bedford-Stuyvesant, Crown Heights, Lefferts Gardens & Bushwick

• Sales fell 11% annually, the quarter’s smallest yearly change of all submarkets. Versus last year, sales were stable for new development and resale co-ops, but resale condo closings fell by double-digits.

• With sales outpacing new supply, active listings fell 28% annually to 152 units. This was the lowest number of fourth quarter listings in three years.

• Versus last year, median price fell 4% to $660K and average price per square foot slid 3% as buyers sought value in regions further east within the submarket.

Kensington, Windsor Terrace, Ditmas Park, Flatbush & Prospect Park South

• Closings in the neighborhoods below Prospect Park dropped 46% year-over-year. Flatbush and Kensington in particular saw far fewer sales than last year.

• Inventory dropped 28% annually to just 90 listings. Fewer listings drove buyers to act more quickly, driving days on market lower by 6% to 87 days on average.

• Median price and average price per square foot figures increased year-over-year. Sponsor closings at Stratford Terrace in Ditmas Park and 325 Lenox Road in Flatbush combined with resale co-op price growth to drive figures higher.

South Brooklyn

• South Brooklyn, the largest submarket, saw 427 closings, down 17% annually. All product types saw year-over-year decreases in closings.

• Active listings at 442 fell 29% year-over-year. A limited number of new listings in Fourth Quarter 2023 drove the decline in listed inventory.

• Average days on market declined 2% annually to 107 days. Nevertheless, South Brooklyn apartments continued to see the longest marketing times in Brooklyn.

• A greater market share of sales under $350K, particularly in Homecrest, Midwood and Sheepshead Bay, pushed South Brooklyn median price and average price per square foot down 8% and 10%, respectively, versus a year ago.