NEW YORK, NY – The winter chill had little impact on the Manhattan and Brooklyn sales and rentals markets, as resale and rental prices in Manhattan and Brooklyn continued to climb in the fourth quarter.
According to the Q4 2015 StreetEasy Market Reportsi, Manhattan’s median resale price grew 7.1 percent from last year to $1,002,008, marking a record high and breaking $1 million for the first time in historyii. Brooklyn’s median resale price also reached a record high, soaring 8.3 percent above last year’s level to $537,193.
The Upper Manhattan submarket continued to see significant price increases in the fourth quarter, reflecting the high level of competition mounting above 110th Street as buyers expand their search for relative value. The median resale price in Upper Manhattan increased at double the pace of Manhattan (14.6 percent year-over-year) to $641,882. In Brooklyn, prices grew the most in East Brooklyn, where the median resale price grew 18.1 percent to $464,285.
Rent prices in Manhattan and Brooklyn also continued to rise. According to the StreetEasy Rent Indicesiii, median rent increased 4.7 percent in Manhattan to a record high of $3,112, and 2.1 percent to a near record high of $2,630 in Brooklyn.
A key factor fueling higher prices is the lack of inventory on the market, intensifying market competitiveness. In Manhattan, sales inventory sunk 14.4 percent from Q3 and remained 3.5 percent below last year’s level. In Brooklyn, sales inventory decreased 13.2 percent from Q3 and only recorded a 1.5 percent increase year-over-year.
Despite the continued upward momentum recorded at the end of 2015, there are signs of an impending slow-down, suggesting that we’ve reached the end of the surge seen over the past two years.
The Manhattan median resale price is forecasted to grow by 0.8 percent over the next 12 months to $1,010,243, according to the StreetEasy Price Forecastiv, a significant reduction from the 7.1 percent growth over the previous 12 months. The last time Manhattan saw annual price appreciation at or below 0.8 percent was February 2012.
Slower price growth is also expected in Brooklyn. The median resale price in Brooklyn is forecasted to grow by 4.2 percent over the next 12 months to $560,005, just half the growth rate of 2015. The last time Brooklyn saw annual price appreciation at or below 4.2 percent was October 2012.
“For the Manhattan and Brooklyn sales markets, 2016 will look more like 2012 and less like 2014,” says StreetEasy data scientist Alan Lightfeldt. “The spike in global and investor demand in 2014 appears to have been fully served. There are even signs of oversupply within Manhattan’s luxury market, which has experienced consecutive price declines since early 2015. These are markets that are returning to sustainable growth rates after the party of 2014: expect lower price appreciation in both Manhattan and Brooklyn in 2016.”
Submarket Name Dec. 2015
Price Index Annual
Change Dec. 2015
Rent Index Annual
Manhattan $1,002,008 7.1% $3,112 4.7%
Downtown $1,236,756 6.1% $3,599 3.9%
Midtown $865,342 4.5% $3,307 4.4%
Upper West Side $1,087,250 8.1% $3,150 5.2%
Upper East Side $1,025,749 9.1% $2,705 5.2%
Upper Manhattan $641,882 14.6% $2,331 6.6%
Brooklyn $537,193 8.3% $2,630 2.1%
North Brooklyn $924,181 8.3% $3,138 3.1%
Northwest Brooklyn $810,109 8.2% $3,048 2.9%
Prospect Park $779,679 7.1% $2,815 4.7%
South Brooklyn $394,554 8.8% $1,595 -1.2%
East Brooklyn $464,285 18.1% $2,578 1.6%