Brooklyn Real Estate Market Report 2022. Courtesy of the Brooklyn Home Team at Keller Williams Realty Empire in Brooklyn NY. Need Help? Contact Us anytime.
Happy Fall y’all! Hope you’re enjoying the weather and breaking out those flannels ? Here at BHT headquarters we’ve been trying to stay warm in this cooling real estate environment. As you probably know, mortgage rates broke 7% recently and this time they are pretty sticky. As of right now, mortgage rates are in the high 6’s – low 7’s, that’s a far cry from the 3.5% mortgage rates we had in October of 2021. Essentially, we are in an environment where rates are double what they were a year ago and that has obviously had an impact on the local market.
The good news is that the rising rates have not totally upended the market in Brooklyn. This could be due to two things, 1) The fact that our market did not overshoot to the upside during the pandemic (i.e. remember flight to the suburbs) and 2) The fact that we still have fairly low inventory in Brooklyn. This quarter (Q4) will tell us a lot about what we can expect in 2023 because we are slowly nearing the end of the rate hiking cycle. If we can remain steady during this last quarter of the year, that will be a sign of the resilience of the Brooklyn real estate market.
As for what we’re seeing personally, thankfully our listings have still been moving, just a little slower than we’re used to. In terms of our buyer clients, some have remained in the market while others have decided to back out of the market altogether. Fortunately we’ve still been getting good activity on our listings, and although offers aren’t as easy to come by, we’ve been able to negotiate win win agreements and move most of our clients into contract. This could be a result of proper pricing, and/or it can also be a sign that the buyers who are still in the market, are very motivated to buy.
One of the most interesting things we’ve been seeing this year is highly motivated sellers. For example, within the last 5-10 years if an offer were to come in $100K below asking price on a house, we wouldn’t even entertain it, but in this market, motivated sellers are actually entertaining these offers and as long as buyers are willing to play ball, motivated sellers are willing to find a win win. This is something new for us, but it is indicative of the “market of the moment” where sellers who want to sell will do what it takes to get it done, and buyers who want to buy may be able to find a good opportunity.
We’ve also been seeing buyers use strategies like ARM loans and 3-2-1 buy downs in order to lock in lower mortgage rates. Both of these can be good strategies if you’re in the market to buy. The 3-2-1 buy down in particular can be pretty attractive because it gives you a lower rate for 3 years and then if rates fall between now and the fourth year, you can refinance to a long term fixed rate.
Regarding home sales, they have been gradually declining all year, likely due to the rising rates which have had a negative impact on demand. However, home prices have not gone negative and that is probably because inventory and month’s supply has remained low. What we are noticing on the seller side is that properties that need work are taking longer to sell, while properties that are in good – excellent condition have been selling, and sometimes pretty quickly. All in all, the Brooklyn market has remained steady, contrary to what you may be hearing on national media channels. In our opinion, all of those areas around the country that overshot to the upside will likely be in for a bumpy ride on the downside. Here in Brooklyn, if inventory remains tight, it may just end up being what keeps the market stable.
We’ll see how it all plays out 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: 1,907 (Was 1,941 last quarter)
- # of Homes selling each month: 275 (Was 286 last quarter)
- Month’s Supply: 6.9 (Was 6.8 last month)
Market in favor of: [ ] Buyers [ ] Sellers [ X ] 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 808 home sales in the 3rd quarter of 2022. That’s DOWN 4.3% from last quarter and DOWN 11.5% compared to the same quarter of last year.
Brooklyn Home Prices
At the end of the 3rd Quarter 2022, the median home price in Brooklyn was $798K. That’s DOWN 0.3% from last quarter and UP 5.9% compared to the same quarter of last year.
At the end of the 3rd Quarter 2022, there was a 6.9-month supply of housing inventory in Brooklyn. That’s UP from the 6.9 month’s supply we had in the previous quarter and down from the 7.9 month’s supply we had in the same quarter of last year. As for active listings, currently there are a total of 1,907 homes for sale in Brooklyn (as per BNYMLS). That’s DOWN from the 1,942 homes we had for sale last quarter and DOWN 18.2% compared to the same quarter of last year when there were 2,332 homes for sale.
Mortgage Industry Insights
“The benchmark fixed rate on 30-year mortgages is closing in on 7 percent, its highest level since 2007, according to Bankrate’s national survey of large lenders.
“Interest rates are going up at a faster pace than most of us have ever seen in our adult lives, and with the amount of global debt out there, this makes for a troublesome combination,” says Greg McBride, chief financial analyst for Bankrate. “Volatility and uncertainty are to be expected, but we’re getting to the point where it pays to expect the unexpected. This is a unique time.”
After rapidly rising in the early months of 2022, the 30-year fixed mortgage rate started to waver in June, approaching 6 percent, then settling into the 5s. That breather was short-lived, as rates resumed rising and topped 6 percent in September. This month, some offers have already broken through the 7 percent threshold.”
Good Reads & Listens
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*The opinions expressed in this Brooklyn Real Estate Market Analysis 2022 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.