Brooklyn Real Estate Market Report – Q2 2020. Courtesy of the Brooklyn Home Team at Keller Williams Realty Empire in Brooklyn NY. Need Help? Contact Us anytime.
Q2 has officially ended and although the numbers are startling, they were also expected considering the stay at home orders and overall impact of COVID-19. As we look at the sales data from the second quarter of 2020, it is obvious that home sales plunged in April, May, and June. Sales dropped by about 36% from Q1 and as you can imagine, we have not experienced something that drastic in quite some time. As for home prices, they rose from Q1 and were up about 5.5% over Q2 in 2019. Home prices have still been positive even with all things considered and that is a sign of the resiliency of our market. Inventory is also up this quarter, and that is more a result of properties that didn’t sell as opposed to more homes hitting the market. Still, inventory is up about 3% compared to Q1.
Now, to put all this into perspective, we look at Month’s Supply which is the figure that lets us know if a particular market is favoring buyers or sellers. Month’s supply below 6 months is said to favor sellers (i.e. Seller’s Market), month’s supply between 6-7 months is said to be a balanced market, and month’s supply over 7-8 months is said to favor buyers (i.e. Buyer’s Market). At the end of Q1 we had month’s supply of 10.4 months and the market did indeed feel like more of a buyer’s market (pre-covid). Now that the pandemic has had it’s initial impact on our local market, we are looking at month’s supply of 12.6 months at the end of Q2. This means that we went from a shifting market to a more pronounced buyer’s market in just one quarter. This is a significant shift.
The good news is that the best case projection for the market coming out of quarantine appears to have been realized. In other words, some people were projecting a steep decline that we would not recover from this year, and some were projecting a delayed spring market. Based on what we’ve been experiencing since May, the latter seems to be what came to fruition. Our business came to a stand still in March and April, but as soon as May came around we started getting a lot of calls and inquiries from buyers and sellers looking to make a move this year. Since May, activity has remained high on both sides. Interest rates have hit historic lows and that has driven demand for any buyers who are still in the position to buy. For people who have been thinking of selling, this pandemic seems to have been the nudge they needed in order to get the process started.
All in all, the market is very active right now and it does indeed feel like the spring market that we would have had if COVID never happened. Being that interest rates are extremely low, and given that the numbers have come down dramatically in NYC, we are anticipating that the market will remain strong for the remainder of the year. In our opinion, the only thing that can change this projection is a second wave, a second shutdown, or large scale job losses in NYC. There is still a lot of uncertainty in the country so we will have to wait and see how Q3 and Q4 turnout, but for now, the market appears to be active and healthy.
We’ll continue to watch the market and keep you posted 🙂
What is Month’s Supply? Months of supply is the measure of how many months it would take for the current inventory of homes on the market to sell, given the current pace of home sales. For example, if there are 50 homes on the market and 10 homes selling each month, there is a 5 month supply of homes for sale.
Months of supply is a good indicator of whether a particular real estate market is favoring buyers or sellers. Typically, a market that favors sellers has less than 6 months of supply, while more than 6 months of supply indicates an excess of homes for sale that favors buyers.
- # of Homes on the Market: 1,880
- # of Homes selling each month: 154
- Month’s Supply: 12.6
Market in favor of: [ x ] Buyers [ ] Sellers [ ] Balanced
Curious how these numbers affect you? Contact us today for a Free Local Market Report: www.bklynhometeam.com/localmarketreport.
Brooklyn Home Sales
The Brooklyn Board of REALTORS® reported a total of 360 home sales in the second quarter of 2020. That’s DOWN 36.2% from the previous quarter and DOWN 37.8% from the same quarter last year.
Brooklyn Home Prices
As of June 30, 2020, the median home price in Brooklyn was $733,000. That’s UP 3.8% from the previous quarter, and UP 5.5% from the same quarter of last year.
As of June 30, 2020 there was a 12.6-month supply of housing inventory in Brooklyn. That’s UP from the 10.4 month supply we had in the previous quarter. As for active listings, currently there are a total of 1,935 homes on the market in Brooklyn. That’s UP 2.9% from the previous quarter.
On Friday, July 24, 2020, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 30-year fixed mortgage rate is 3.130% with an APR of 3.410%. The average 15-year fixed mortgage rate is 2.720% with an APR of 3.030%. The 5/1 adjustable-rate mortgage (ARM) rate is 3.190% with an APR of 3.880%.
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*The opinions expressed in this Brooklyn Real Estate Market Analysis 2020 are intended to supplement opinions on real estate expressed by local and national media, local Brooklyn real estate agents and other expert sources. You should not treat any opinion expressed on this report as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of opinion. The Brooklyn Home Team at Keller Williams Realty Empire does not guarantee and is not responsible for the accuracy or completeness of information, and provides said information without warranties of any kind. All information presented herein is intended and should be used for educational purposes only. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. All investments involve some degree of risk. The Brooklyn Home Team will not be liable for any loss or damage caused by your reliance on information contained in this report.