Elegran Brooklyn Market Update: November 2023

Brooklyn Market Update: Sellers hold a slight advantage

This month, while sellers are finding the market leaning slightly in their favor due to increased demand, buyers are not without their advantages. 

Bellow, the Elegran | Forbes Global Properties Leverage Indicator provides a clear snapshot of the market, clearly showing whether it’s buyers or sellers who have transactional leverage. 

This index is determined by 4 key metrics and how they've been trending since the last month:

• SUPPLY (favored BUYERS in October)
• DEMAND (favored SELLERS in October)
• MEDIAN LISTING DISCOUNT (favored BUYERS in October)
• MEDIAN PRICE/SF (favored BUYERS in October)

We’ll examine these four metrics individually before taking a look at the indicator.

Brooklyn Supply

Supply increases rapidly in September and October, and typically peaks at the end of October before a sharp drop in November. Although the chart above displays less than 4 years of data, it shows that Brooklyn's supply follows a regular annual cadence. So, although Buyers enjoy more listings to choose from in October, while sellers suffer from more competition, that balance reverses course quickly in November. What does this mean for…

• BUYERS?  Peak October opportunities will decline sharply in November.
• SELLERS?  Peak October competition will decrease sharply in November.

Brooklyn Demand

Brooklyn’s demand, measured by contracts signed, bottomed in September. Since then, it bounced back 24% in October. What does this mean for…

• BUYERS?  More competition.
• SELLERS?  More activity.

Brooklyn Median Price/SF

The median price per square foot has varied by 20% over the past 12 months and has declined since July. What does this mean for…

• BUYERS?  Prices are moving in their favor.
• SELLERS?  Prices are moving against their interests.

Brooklyn Median Listing Discount

After a steep decline in Q2, the metric began ticking up again in September and October. What does this mean for…

• BUYERS?  Discounts are moving in their favor.
• SELLERS?  Discounts are moving against their interests.

Elegran | Forbes Global Properties Leverage Indicator: Brooklyn

The Elegran | Forbes Global Properties Leverage Indicator signals who holds the upper hand in real estate transactions—buyers or sellers. 

Looking at the graph below, this is indicated by the direction of the curve, where:

• An increasing trend from left to right indicates a seller’s market
• A decreasing trend from left to right indicates a buyer’s market

The relative strength of that leverage is indicated by the slope of the curve, where:

• A gentle slope indicates a weak advantage by one party over the other
• A sharp slope indicates a strong advantage
  

Although three of the four metrics powering the indicator favored buyers this month, the fourth, demand, shifted 24% toward sellers. This means sellers maintain a light grip on the market.

Rental Remarks

In September,* the median rent in Manhattan has cooled ever so slightly but remains near record highs. On the other hand, the average 30-Year Fixed Rate JUMBO Mortgage Index¹ trends near 8%. So, it’s a “catch-22” for renters, as the rent versus buy scale may feel equally punitive on both sides.

*August 2023 data is not yet available.

¹Courtesy of Federal Reserve Bank of St. Louis

Investor Insights 

All-Cash Opportunities

With Manhattan cap rates between 2.5 - 3.0% and the average JUMBO mortgage APR at 7.529%,² there is simply no net income potential on leveraged investments.  However, with rents near all-time highs, opportunities exist for all-cash buyers.

Global Currency Opportunities 

On the sell side, a strong USD affords foreign investors, depending on their native currency, the opportunity to realize significant capital gains on selling their assets.

²Data courtesy of Wells Fargo, Chase, and Bank of America

If you would like to chat about the most recent market activity, feel free to contact us at info@elegran.com or connect with one of our Advisors.

About Us

Welcome to Elegran, where our mission is to revolutionize the world of real estate. Founded in 2008 by Michael Rossi, our journey began with an unwavering drive for motivation, innovation, and a genuine care for our clients.

As an independently owned brokerage, we pride ourselves on our elite team of "advisors," offering a personalized touch that goes above and beyond the traditional real estate experience. Armed with robust data insights, we empower our clients to make informed decisions that lead to success.

Distinguished as the exclusive member of the invitation-only Forbes Global Properties network in NYC, Elegran proudly stands at the forefront of excellence. This exclusive partnership broadens our horizons, enabling us to connect buyers, sellers, and investors with extraordinary luxury properties not only in New York City but across the globe.

Our passion lies in turning your real estate dreams into reality, and we are committed to providing exceptional service at every step of the journey.

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