Brooklyn Real Estate Market Report: Q3 2020. Courtesy of the Brooklyn Home Team at Keller Williams Realty Empire in Brooklyn NY. Need Help? Contact Us anytime.
Here we are, just wrapped up the third quarter of the year and we are heading into a very uncertain fourth quarter. Now that we are 6 months into the global pandemic, we are starting to get a good feel for the short term impacts COVID-19 is having on our local real estate market. The good news is that the market is still moving, interest rates are still low, and there is still demand for homes. The not so good news, is the fact that we are currently experiencing a “flight to the suburbs”, and as a result, some of our demand is exiting to areas like New Jersey, Long Island, Westchester county, and Connecticut. In addition to this, inventory is continuing to grow. This combination of growing supply along with exiting demand may very lead to a sustained buyer’s market unless we see demand come back strong.
As we head into the fourth quarter we find ourselves with month’s supply of 19.9 months. This is a staggering number that we have not seen in a long time. What that means is that we are currently in a pronounced buyer’s market. However, this is is not completely reflective of the current market because the second quarter of the year was brought to a complete halt by the shutdown. When that happened there was talk of a surge in sales following the reopen due to pent up demand from home buyers and that would likely spill over into the third quarter of the year. Based on the recent pending sales in July, August, and September, that is exactly what we are seeing. For example, pending sales for the third quarter were up significantly from the second quarter of the year, and up year over year as well. This is a good sign that demand is coming back, however, demand for certain property types seems to have suffered and may not be coming back any time soon.
Based on what we’ve been seeing with our own listings, it appears that demand for multi family homes is still very high (as long as it’s priced right), demand for single family homes is also strong, but demand for coops & condos seems to be down the most. Fortunately we have been able to sell most of our listings, but the most challenging sales we have had since March have definitely been our coop and condo listings. In our opinion, this is because the desire to live in a building is not very popular right now, and because a lot of those would-be coop/condo buyers are probably the people who are now looking outside of NYC since many employers are adopting the new work from home economy.
The fourth quarter will be very telling for us and it will be a good indicator as to what we can expect to see in 2021. There are several factors that we have yet to see play out fully (i.e. Commercial market impact, rental market impact, shutdowns, presidential election, flight to the suburbs, etc) so we will monitor 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: 2,463
- # of Homes selling each month: 124
- Month’s Supply: 19.9
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 380 home sales in the third quarter of 2020. That’s UP 4.7% from last quarter and DOWN 43% from the same quarter of last year.
Brooklyn Home Prices
As of Sept 30, 2020, the median home price in Brooklyn was $790,000. That’s DOWN 4.6% from last quarter and UP 3.9% compared to the same quarter of last year.
As of Sept 30, 2020 there was a 19.9-month supply of housing inventory in Brooklyn. That’s UP from the 12.6 month supply we had in the previous quarter and up from the 10.7 month’s supply we had in the same quarter of last year. As for active listings, currently there are a total of 2,463 homes on the market in Brooklyn. That’s UP 16.6% from the previous quarter and UP 11.8% compared to the same quarter of last year.
On Thursday, October 15, 2020, according to Bankrate’s latest survey of the nation’s largest mortgage lenders, the benchmark 30-year fixed mortgage rate is 3.020% with an APR of 3.330%. The average 15-year fixed mortgage rate is 2.550% with an APR of 2.840%. The 5/1 adjustable-rate mortgage (ARM) rate is 3.100% with an APR of 4.070%.
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*The opinions expressed in this Brooklyn Real Estate Market Report: Q3 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.