By Nicole Friedman
Brooklyn's housing market is showing fresh signs of life, boosted by home buyers seeking more space and lower prices than across the river in Manhattan.
The Covid-19 pandemic and subsequent shelter-in-place restrictions this spring prompted some New Yorkers to decamp to second homes, move in with family outside the city, or relocate to the suburbs.
Some real-estate industry watchers forecast an exodus from the city, as urbanites switched to working from home and sought more living space. Manhattan has been especially hard hit. New contract signings fell 42% from year-ago levels in September, according to brokerage Douglas Elliman.
But Brooklyn started picking up again over the summer. Newly signed contracts exceeded year-ago levels for three straight months through September, according to Douglas Elliman. September contracts rose 21% from a year earlier.
"The urban-to-suburban narrative is actually a Manhattan-to-suburban narrative, or a Manhattan-to-other-borough narrative," said Jonathan Miller, chief executive of appraisal firm Miller Samuel Inc. Brooklyn activity has ramped up since the end of the lockdown in June, he added.
For the third quarter overall, pending sales in Brooklyn dropped 11% from a year earlier but surged 157% from the second quarter, when the market was largely shut down due to the pandemic, according to brokerage Corcoran Group.
Activity in Brooklyn could decline again this fall. The borough is home to some Covid-19 hot spots, where the state has tightened social-distancing restrictions. Gov. Andrew Cuomo closed schools and nonessential businesses earlier this month in parts of Brooklyn including Borough Park and Midwood. The restrictions ban in-person real-estate showings.
But other neighborhoods are drawing buyer interest as new supply hits the market, offering renters the opportunity to own. Brooklyn for-sale listings hit an eight-year high in the third quarter, up 11% from a year earlier, according to Corcoran.
Amy Bisno and her partner started shopping for an apartment in Brooklyn at the beginning of the year, stopped when the pandemic erupted and then resumed this summer. They had an offer accepted on a two-bedroom apartment this month in Park Slope, the same neighborhood where they have been renting a one-bedroom.
"We had moments of thinking of leaving the city [but] said, 'This is where our home is, and we'll get through this,' " Ms. Bisno said. "I feel like the people who are buying now are those who really intend to stay."
Some buyers are pouncing now that Brooklyn prices have dipped after years of running up in borough hot spots. Christine Wong and Addison Chen had looked for an apartment to buy pre-pandemic but struggled to find good options in their budget. When the market reopened this summer, Brooklyn apartments that would previously be listed above $1 million were listed at $800,000 or $900,000, Ms. Wong said. "We were like, this has to be it," she said. "Now the places we actually wanted were in our price range."
Ms. Wong and Mr. Chen lost out on a condo in Cobble Hill to another buyer before having an offer accepted on a two-bedroom apartment in downtown Brooklyn last month.
Overall, the median Brooklyn sales price in the third quarter was $689,000, Corcoran said, edging up 3% from a year earlier, while the average price for a square foot in Brooklyn held steady from a year ago at $930. That is less than half of Manhattan's average of $2,065 a square foot, Corcoran said.
"The attraction to Brooklyn is really just more space, and the options of being able to get outdoor space are much more available and in a price range that's really attractive," said Noemi Bitterman of Compass.
Brooklyn apartments are continuing to sell at or near their asking prices, while Manhattan apartments are often selling at a discount, according to real-estate data company UrbanDigs Analytics LLC.
Buyers are less willing to pay a premium these days to live near Manhattan's offices and amenities, said John Walkup, UrbanDigs's co-founder. Manhattan inventory rose 28% year-over-year to hit the highest level since 2009, according to Corcoran.
Maurice Collada and Casey Calhoun bought a three-bedroom apartment in Park Slope this month. They have been renting a two-bedroom in the neighborhood and, with a second child on the way, wanted more space.
"We didn't get what was, in my dreams, the 'Covid bargain,' " Mr. Collada said. But "in non-Covid times, it might have fallen into a bidding war and we would have been priced out."
Write to Nicole Friedman at email@example.com
(END) Dow Jones Newswires
October 21, 2020 08:14 ET (12:14 GMT)Copyright (c) 2020 Dow Jones & Company, Inc.