Brooklyn Market Update:  Shift in Tides Ushers Buyers into a Current of Opportunity

This October unveils a shift in Brooklyn’s real estate landscape. A significant 8% rise in available properties and a 23% reduction in demand are creating favorable conditions for potential buyers. With an enriched inventory and subdued competition, buyers are poised to explore an array of choices and potentially more negotiable terms.

Sellers, albeit in a market traditionally in their favor, are tasked with differentiating their offerings in an increasingly competitive environment. Effective marketing and pricing strategies become essential to capture buyer attention and facilitate transactions.

The rental market continues to project strength, with median rents maintaining their peak levels. This persistence of high rents introduces a layered complexity for individuals evaluating the rent versus buy equation. We dissect this intricate dynamic, offering critical insights to navigate the challenging terrain of escalating rental costs and the considerations influencing the decision to invest in property ownership. Investors are not left behind in this unfolding narrative. The interplay of a robust U.S. dollar and variable cap rates offers a dual-edged scenario—rich with opportunities yet demanding astute, strategic navigation. 

Every data point and trend outlined in this update is geared towards empowering stakeholders with the intelligence to make informed, strategic decisions in Brooklyn’s multifaceted real estate market this October. Let’s dive in!

Brooklyn Supply

In Brooklyn, the property market is witnessing an 8% growth in listings, indicating a resurgence in supply. This uptick is attributed to the typical fall increase in new inventory, enhancing the diversity of available properties. For buyers, this signifies a richer array of options and the freedom to explore diverse choices. Sellers, however, are facing heightened competition, necessitating innovative strategies to highlight the unique value propositions of their properties. The enriched supply landscape is seen as a facilitator for more balanced and nuanced transactions in the real estate market.

• BUYERS?  More options.
• SELLERS?  More competition.

Brooklyn Demand

Demand in Brooklyn has experienced a 23% decrease, a shift that is enhancing the negotiating power of potential buyers. With fewer contracts being signed, buyers can explore the market with less competition, making it an opportune time for those looking to make a purchase. Sellers are encouraged to optimize their offerings to stand out and attract buyer interest in a market where buyer activity is subdued. This dip in demand is instrumental in creating a temporary, yet favorable environment for buyers to engage in the market.

• BUYERS?  Less competition.
• SELLERS?  Less activity.

Brooklyn Median Price/SF

Brooklyn's real estate market exhibits resilience with a slight 0.5% increase in the median price per square foot, marking a neutral and stable pricing environment. For buyers, this signals a consistent market with predictable pricing patterns. Sellers benefit from the assurance of stable property valuations, fostering a conducive atmosphere for transactions. The marginal increase does not heavily tilt the market in favor of either party, ensuring a balanced interaction for both buyers and sellers, and underlining the market's adaptability amidst fluctuating supply and demand dynamics.

• BUYERS?   Neutral
• SELLERS?  Neutral

Brooklyn Median Listing Discount

Brooklyn has seen a significant 27% increase in the median listing discount to 3.3% in September. This amplification is a boon for buyers, opening avenues for price negotiations and affordability. For sellers, this environment requires adaptive pricing strategies to attract buyers while retaining value. This surge in discounting indicates an enhanced buyer’s market, marking an opportune period for prospective homeowners to capitalize on reduced prices and for sellers to innovate in presenting competitive offerings amidst a landscape of increasing buyer negotiation power.

• BUYERS?  Discounts have moved in their favor.
• SELLERS?  Discounts have moved against their interests.

Elegran | Forbes Global Properties Leverage Indicator: Brooklyn

The Leverage Indicator highlights a temporary shift towards a buyer's advantage in Brooklyn. This change is attributed to increased supply and decreased demand. 

While the overarching market still favors sellers, buyers currently enjoy enhanced leverage. The juxtaposition of increased listings and softened buyer activity underscores opportunities for advantageous deals for buyers. Sellers should adapt strategies to resonate in this adjusted landscape, ensuring properties are competitively priced and marketed to capture buyer interest amidst this transient phase of amplified buyer negotiation power.

Rental Remarks

August¹ median rent in Brooklyn hovered near July’s all-time high*, and the average 30-Year Fixed Rate JUMBO Mortgage Index² is trending above 7.5%.  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.

Investor Insights 

All-Cash Opportunities

For investors, the Brooklyn market presents a mixed bag of opportunities and challenges. With Brooklyn cap rates between 2.5 - 3.5% and average JUMBO mortgage APR at 7.48%, leveraged investments have no net income potential. However, with rents soaring to all-time highs, all-cash buyers may discover pockets of opportunity.

Global Currency Opportunities 

Internationally, the strength of the US dollar is a crucial consideration. Depending on their home currency, foreign investors may realize substantial gains when selling their assets due to the robust USD. Conversely, a weakening dollar creates opportunities for foreign investors to enter the Brooklyn real estate market and benefit from its stability and potential for price appreciation.

¹  September 2023 data is not yet available

² Courtesy of Federal Reserve Bank of St. Louis

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.

Are you ready to experience the Elegran difference? Dive into the possibilities at www.elegran.com and embark on an unforgettable real estate adventure with us.