A turbulent year ended with a significant uptick in home buying across three New York City boroughs, according to StreetEasy’s Q4 2020 Market Reports [i]. But with the supply of for-sale homes continuing to outpace demand, buyers remain in the driver’s seat of the NYC real estate market for the new year.
A record high of 2,213 sales contracts were signed in Brooklyn during the fourth quarter— a 30.3% increase from the previous year. In Manhattan, pending sales were 23.1% above the year prior, at 2,907 — the most since the second quarter of 2019. Queens saw 1,132 homes entering contract, an increase of 29.8% compared to last year. Across these three boroughs, deals were done at a pace more typical of a busy spring home shopping season.
Yet the year’s worth of data shows that the 2020 sales market was extremely sluggish. The number of homes that went into contract throughout the year in Manhattan, Brooklyn, and Queens was just 10,751 — about half of the 21,410 sold in 2019.
The spike in sales was also not enough to outweigh growth in inventory. In Manhattan, nearly 3,000 homes entered contract, but more than 4,200 units were listed for sale — on top of the inventory already on the market. Total Manhattan inventory was 24.3% higher than a year prior, the largest year-over-year increase on StreetEasy record. In Brooklyn, total sales inventory was 10.2% above 2019 levels, and in Queens, it was 6.9% higher.
Brooklyn 1-3BRs Under $800K on StreetEasy Article continues below
Prices in Manhattan and Brooklyn continued to adjust to this pressure. The StreetEasy Manhattan Price Index [ii] fell 4.6% — the sharpest year-over-year decline on record. The median asking price in Manhattan is now $1.3 million, the lowest it’s been since the spring of 2014. The Brooklyn Price Index dropped 2.2% year over year, and the median asking price was $950,000. Queens bucked the trend with an increase of 1.4% and a median asking price of $649,000.
“Despite the fact that New York City feels very different from a year ago, many are displaying confidence in the long-term state of the city by putting down roots here, especially in Brooklyn,” says StreetEasy Economist Nancy Wu.
“Even with the year closing on a high in terms of sales, the weakness in the sales market is far from over. The pandemic has left a full home shopping season’s worth of inventory sitting on the market. That will build up and have consequences in the long term, like the need for more significant price drops, especially in Manhattan.”
Manhattan Prices Likely Have Much Further to Fall
Sales prices fell the most in Manhattan out of the three boroughs analyzed. The 4.6% drop in the StreetEasy Manhattan Price Index was the largest on record for the borough. Of all homes on the market in Manhattan, only 25% had a price cut in the fourth quarter, the same share as this time last year. This shows that sellers have not yet come to terms with the state of the market, and more price cuts will be needed to even out supply.
Brooklyn Is Red Hot, But Prices are Still Adjusting
The number of pending sales in Brooklyn reached a record high in the fourth quarter, leading to a 30.3% increase over 2019. Even with high demand for Brooklyn homes, the StreetEasy Brooklyn Price Index fell 2.2% annually due to sky-high inventory levels. Demand has not yet caught up with supply, which means that the market is still adjusting downward — a good sign for buyers looking to make a purchase in Brooklyn in 2021.
Queens Prices Remain Relatively Stable
Inventory rose 6.9% in Queens year over year — a significant amount, but much less than the growth in Manhattan and Brooklyn. Pending sales also rose 29.8% from last year, with 1,132 homes entering contract. The rise in remote work and desire for more space, plus stable inventory in the borough, fueled a 1.4% increase in the StreetEasy Queens Price Index. The median asking price in Queens in the fourth quarter was $649,000.
View all StreetEasy Market Reports for Manhattan, Brooklyn, and Queens, with additional neighborhood data and graphics. Definitions of StreetEasy’s metrics and monthly data from each report can be explored and downloaded via the StreetEasy Data Dashboard.
[i] The StreetEasy Market Reports are a monthly overview of the Manhattan, Brooklyn and Queens sales and rental markets. Every three months, a quarterly analysis is published. The report data is aggregated from public recorded sales and listings data from real estate brokerages that provide comprehensive coverage of Manhattan, Brooklyn and Queens, with more than a decade of history for most metrics. The reports are compiled by the StreetEasy Research team. StreetEasy tracks data for all five boroughs within New York City, but currently only produces reports for Manhattan, Brooklyn, and Queens.
[ii] The StreetEasy Price Indices track changes in resale prices of condo, co-op, and townhouse units. Each index uses a repeat-sales method of comparing the sales prices of the same properties since January 1995 in Manhattan and January 2007 in Brooklyn and Queens. Given this methodology, each index accurately captures the change in home prices by controlling for the varying composition of homes sold in a given month. Levels of the StreetEasy Price Indices reflect average values of homes on the market. Data on the sale of homes is sourced from the New York City Department of Finance. Full methodology here.