The Manhattan real estate market bucked the trend of declining market activities and registered a very strong showing in first quarter 2017, which set an optimistic tone for the rest of the year. According to Compass Research, overall number of contracts signed increased 16% YoY, after 5 consecutive quarters of decreases. The UES, in particular, saw an impressive 24% jump in its contracts signed, owing to the Second Avenue Subway. The increased sense of stability, coupled with an urgency to move before big jumps in mortgage rates, nudged the buyers into actions. The median sales price increased 5% YoY to 1.2mm. The absorption rate, or market supply, is virtually unchanged from a year ago at 5.6 months, still low compared to the long-term equilibrium.
The Brooklyn market is a different story. When Manhattan went into a rough patch last year, Brooklyn was untouched. Bidding wars raged on and there was no sign of a slowdown. The median sales price registered a record-high median sales price of $925k in 1Q17, representing a 19% increase YoY. However, transaction volume decreased 6%, hinting at some resistance at these high prices. As my business is almost equally split between Manhattan and Brooklyn, I can’t help but compare the boroughs sometimes. Compared to Manhattan, a much larger percentage of my buyers in Brooklyn are primary owners, as opposed to investors. No wonder there’s less correlation to the stock markets for Brooklyn real estate and stronger support for high end properties in Brooklyn.