Brooklyn Market Overview
Our top line conclusion, after poring over the 202 numbers, is that the significant rise in interest rates did not have the expected negative impact on home prices. We did see a significant drop in the number of transactions but only a single digit drop in median prices.
As we spoke with buyers and sellers every day, we came to the conclusion that the drop in the number of transactions was mostly due to less supply, not less demand. Why was supply so low? Potential up-sizing sellers did not want to give up their low interest rates and potential down-sizers read national headlines that the real estate market was down. Conversely, there were many, many buyers looking for Brooklyn homes. That excess of demand over supply helped buoy prices in 2023.
Some outliers to the 2023 townhome data were found: in Bedford-Stuyvesant we saw median prices increase by 49.1% from 2022 to 2023. The only neighborhood we saw with a positive increase was Prospect Lefferts Gardens with sales transactions up 13.5%.
The Ryan + Ryan Team navigated competitive situations for some homes, negotiated hard on behalf of buyers for homes that were sitting on the market, and postponed the search for some buyers who were priced out after interest rates rose beyond their reach. We also saw sellers not willing to sell for less than their neighbors did in 2022 or 2021, even if the market did not bear that price. Our conclusion? Don’t bet against Brooklyn and New York City real estate. Interest rates may be higher, but people’s desire to live in Brooklyn has not been daunted a bit. As long as that is the case, owning Brooklyn real estate is a good idea.
Apartments
1 Bedrooms: We saw a significant decline (54%) in transactions in the one-bedroom asset class in 2023. Not surprisingly, most one-bedroom buyers saw that renting for another year would be more affordable than buying, given the rise in interest rates. Luckily, prices did not follow suit and only dropped 6%. We envision more buyers returning to the market as rates (hopefully) drop in 2024.
2 Bedrooms: Similar to the 1 bedroom market, 2 bedroom apartments saw a steep drop in transactions (44%) but only a minor 3% drop in median price. Sticking with the theme we saw across Brooklyn, there were fewer buyers but just as few sellers, keeping transactions limited but prices somewhat flat.
3 Bedrooms: Unlike previous years, we did not have any sizeable new development buildings to account for a significant increase in 3 bedroom sales. In years past, notable buildings like 1 PPW in Park Slope and The Quay in Brooklyn Heights boosted transaction numbers and prices; this year, we saw dips of 35%(transactions) and 4%(median price).
4+ Bedrooms: Interestingly, the 4+ bedroom category saw the lowest drop in transactions(25%) and the highest drop in median price(17%). This category is often subject to large price changes as the amount of transactions is always lower than smaller apartments.
Townhouses
As we look back over 2023, we see the following general trends:
The median price for a townhouse in brownstone Brooklyn fell by 4%. The number of townhouses sold fell by 27%. These numbers vary greatly by neighborhood (see inside for your own neighborhood), but the basic factors affected the whole borough; namely, rising interest rates and a shrinking supply of homes for sale. In short, it was a difficult time to be a buyer (nothing to choose from) AND not easy to be a seller (giving up your 3% mortgage to move on is painful).
So far, in 2024, rates have slipped back a bit and both buyers and sellers are showing more optimism. We are glad to see it and look forward to more good news as spring approaches.
As always, if you have an interest in knowing your home's value
for any reason at all, we are here and happy to help.
Brooklyn
By the Numbers
Median Price
1 BEDROOM
-6.03%
$689,000
2 BEDROOM
-3.18%
$1,238,885
3 BEDROOM
-4.62%
$2,085,000
4+ BEDROOM
-19.39%
$4,100,000
Transactions
1 BEDROOM
432
-54% from 2022
2 BEDROOM
726
-49% from 2022
3 BEDROOM
337
-39% from 2022
4+ BEDROOM
68
-35% from 2022
Brooklyn Townhouses
Median Price by Neighborhood
NEIGHBORHOOD
2016
2017
2018
2019
2020
2021
2022
2023
% change from prior year