As real estate markets in Manhattan and surrounding regions have been flat, the market in Brooklyn continued to rise in 2017. The borough had their third-highest pricing report ever, as the median sales price was $770,000, a 2.7% increase over last year. The appraisal firm of Miller Samuel explained price growth has been modest, yet a short supply of inventory has led to continued good results. In the fourth quarter of 2017, there were merely 1,711 available homes, a 23% decline in availability from 2016. Inventory in Brooklyn has now declined for ten consecutive quarters. The continued growth in Kings County real estate prices led many buyers to the Queens area in 2017, but the fourth quarter results indicated that this “spillover” may have cooled. With continued volatility in these markets, it is recommended that those considering a transaction retain the services of a local real estate attorney.
Legislative Tax Implications
The market in Manhattan stalled toward the end of 2017, much of this stemming from concerns regarding the federal overhaul of taxes. These tax concerns were widespread, with the exception of Brooklyn. Jonathan Miller, an analyst who recently published a full market report, says it is difficult to forecast what impact the changes to the tax system will have on the market yet. He feels the majority of the hesitancy among buyers will hinder the market's higher end. Various New York brokerages affirmed this, reporting slow sales as buyers await the tax consequences.
Sales of luxury apartments fell by roughly 20% in the final quarter of 2017; however, the market for units between $500,000 and $1 million was up by 11.5%. The entry-level prices for units considered in the “luxury” category are down slightly at about $1.38 million. Much of the fall is believed to stem from the drop in the flow of legacy contracts from new luxury developments. This year's expectations are that supply will rise and continue to drive the high-end prices lower. Buyers have been favoring smaller apartment units, lowering demand for the luxury inventory.
Aleksandra Scepanovic, of Ideal Properties Group LLC, expects the Brooklyn market to continue to rise, saying the borough is among the most desirable markets. Halstead Property Development found sales of condos in the $2 to $3 million range in Brooklyn increased again in 2017. Halstead said condominiums above $3 million made up roughly 38% of the available inventory. Meanwhile, less expensive cooperatives were pursued heavier by buyers. According to Frederick Peters of Warburg Realty, the best-performing markets were Brooklyn, Long Island, and Astoria. He feels the new legislative tax plan may hinder some real estate growth, but the strength of the stock market may offset the impact. With this current level of uncertainty regarding tax implications and considerable regulatory changes for 2018, those engaging the market should definitely do so with assistance from a seasoned real estate attorney that works closely in this region.