4Q 2017 Highlights
Brooklyn echoed Manhattan market in closing activity this quarter as buyers anticipated sweeping changes of the tax legislation and rushed to lock in the full $1M mortgage interest deduction on new originations. This urgency was reflected by a 14% year-over-year increase in the number of closings by December 15th, coupled with a surge of transactions occurred in the $500K-$1M price segment, which was most impacted by the mortgage interest deduction limit change. Additionally, it is interesting to note that the resale condos and co-ops primarily contributed to the year-over-year increase in the number of closings. While the new development closings distributed with less extremity this quarter against 4Q16, demonstrated by five vs. two projects with 10 or more closings totaling the same number of 106 transactions.
Buyers had fewer options in the fourth quarter as the overall number of available units declined by 10% year-over-year, coupled with an increase of contract activity, indicating a healthy demand and absorption level on the market. The median asking price of $945K in Brooklyn was down 3% compared to 4Q16, signaling sellers’ gradual price adjustment in reaction to the relatively “more attainable” Manhattan market.
4Q17 contract activity was particularly strong, as the number of contracts signed surpassed the 1,000-unit threshold for the fourth time in the past 10 years, achieving the highest number vs. all previous fourth quarters. Contract activity in the below $1M price segments exhibited strength during the fourth quarter, with both the below $500K & $500K-$1M categories posting year-over-year gains of 19% and 15%, respectively. The 13% year-over-year condo contract velocity increase was mainly driven by an 81% year-over-year increase in the $2M-$3M price segment as a result of 9 contracts signed at 280 St. Marks and 5 contracts signed at The Standish. Please note that prices of contracts signed represent last asking prices and do not take into consideration new development properties which decline to report sales.