Earlier this week, the Real Deal reported that February home sales in Brooklyn were down 44 percent, compared to the same month last year. The total dollar volume also fell, albeit slightly less dramatically, by 33 percent (indicating, among other things, that the average price per sale went up). The numbers, compiled from data issued by Property Shark, included co-ops, condos, and one- and two-family townhouses.
The story speculated that the decline was due not to a lack of demand but a shrinking supply. One agent with Neuhaus Realty pointed out that “there are not too many homes up for sale,” and predicted, using economics, that pricing will go up as inventory goes down.
Another report, released today by real estate firm Ariel Property Advisors, provides one potential explanation for the dip in single-family home sales: multifamily apartment buildings purchased by commercial enterprises are soaring. For January, the number of Brooklyn sales was up 120 percent compared to the same period a year earlier. The report counted multifamily buildings of ten units or more that traded for at least $1,000,000. Brooklyn outpaces the other boroughs in volume and dollars; in January, there were 22 sales, encompassing 40 buildings, for a gross amount of $239,985,000. That dollar volume is a 409 percent increase from January 2013.
So, what’s going on here? While it’s folly to extrapolate individual homeowner behavior from market-wide data sets, these two reports considered in tandem indicate a worrying trend for prospective Brooklyn homeowners: namely, that the market is being seen as an investment opportunity, not for single families but for hyper-monied corporate investors (which I wrote about here). Real estate dollars are still pouring into the borough, just in increasingly conglomerated chunks. Rent forever!
Interestingly, the borough with the second-largest increases relative to last January? The Bronx. Developers, check your motherfuckin’ Christopher Columbus Syndrome.
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