The media loves to talk about real estate prices in New York City’s boroughs. More often than not, what gets reported isn’t exactly the entire truth. Biased reporting oftentimes skews the reality of New York City’s real estate market. That leaves people wondering who the real winner is in the real estate battle: Manhattan or Brooklyn?
Residential Real Estate Sells Faster in Manhattan
Despite all the hype about Brooklyn as an enclave for wealthy young people, Manhattan’s residential real estate listings stay on the market for fewer days. Brooklyn listings stayed on the market an average 131 days in Q1 of 2014.
In Manhattan, listings stayed on the market for 115 days during the same quarter.
Perhaps more importantly, the number of days on the market for Manhattan sales increased from 95 in Q4 2013, which is a difference of 20 days. In Brooklyn, residential real estate stayed on the market for 98 days in Q4 2013 — a difference of 33 days.
Manhattan’s Listing Discounts Change Less Than Brooklyn
The view of New York City real estate gets a little cloudier when one considers property listing discounts.
Manhattan has a relatively flat listing discount. In Q1 2013, discounts were only about 4.3 percent. They have fallen since then, but not by much. Discounts were 3.6 percent in Q4 2013 and 2.6 percent in Q1 2014.
Brooklyn’s listing discounts change rapidly. The Q1 2013 listing discount for Brooklyn was 1.1 percent. However, the 4Q 2013 discount was an incredible 16.4 percent, but the listing discount had returned to 1.1 percent by the time Q1 2014 rolled around.
One could interpret this to mean that Brooklyn’s popularity changes significantly from quarter to quarter while Manhattans remain more consistent. If Brooklyn real estate buyers can bring prices down by more than 16 percent, sellers either want to move quickly or they set their listing prices incredibly high. However, the 1.1 percent listing discount shows that sellers have more interested buyers during some quarters.
Average Prices Are Higher in Manhattan Than in Brooklyn
Buyers looking to live in properties often have different perspectives than buyers who just want good investments.
The average sales price in Brooklyn for Q1 2014 was $681,182, and Manhattans were $1,773,523 during the same quarter. Median prices were also higher in Manhattan ($972,428) than in Brooklyn ($520,000). It’s obviously more affordable to purchase real estate in Brooklyn.
Easier doesn’t always mean better, though. Investors with plenty of money to spend should look at the price changes to make sure they get good returns. Manhattan’s average sales price was $1,354,766 in Q1 2013. Prices went up 30.9 percent to $1,538,203 by Q4 2013. Prices then went up again 15.3 percent to $1,773,523 between the end of 2013 and Q1 2014.
Brooklyn’s sales prices are more consistent (Q1 2013: $634,594; 4Q-2013: $699,334; Q1 2014: $681,182). That’s potentially good for residential buyers, but not great for investors who want to make money by selling property shortly after purchasing it.
Luxury Sales Make Manhattan Look More Expensive
Whether buying property to live in or invest, it’s important to consider that luxury sales skew average prices higher.
The average sales price of the luxury real estate in Manhattan during Q1 2014 was $7,390,037, up 19.1 percent from Q4 2013’s $6,206,155. Those higher prices push the average higher. Brooklyn’s luxury sales actually fell during the same quarter, from $2,052,186 to $1,978,121. That skews average prices less.
Knowing these numbers, which borough do you think it’s best to buy in? What factors affect your decision most?