The Corcoran Report 2Q17 BROOKLYN ContentsSecond Quarter 2017 3 Overview 3/7 Market Wide 4 Sales 5 Inventory 6 Prices 7 Market Share 8 Resale Co-ops 9 Resale Condos 10 New Developments 11 Luxury 12/27 Neighborhoods 12/13 Williamsburg & Greenpoint 14/15 Brooklyn Heights, Cobble Hill, Dumbo & Downtown 16/17 Park Slope & Gowanus 18/19 Fort Greene, Clinton Hill & Prospect Heights 20/21 Carroll Gardens, Boerum Hill & Red Hook 22/23 Bedford-Stuyvesant, Crown Heights, Lefferts Gardens & Bushwick 24/25 Kensington, Windsor Terrace, Ditmas Park, Flatbush & Prospect Park South 26/27 South Brooklyn 28 Methodology The following members of the The Corcoran Group made significant contributions to this report: Kristy Hoffman I Steve Pak I Madison Rosenwald I Ryan Schleis I Brie Train 2Q Corcoran2017 Report Overview Brooklyn 2Q17 2Q16 % Chg (yr) 1Q17 % Chg (qtr) Brooklyn’s second quarter maintained Overview the pace set at the start of 2017 Closed Sales 1,459 1,248 17% 1,456 0% and improved on the sales activity Contracts Signed 1,186 1,036 14% 1,016 17% recorded in Second Quarter 2016. Inventory 1,723 2,234 -23% 2,063 -16% Challenged by limited resale Months of Supply 3.8 5.1 -25% 4.7 -20% inventory, buyers turned to new Average Days on Market 79 65 22% 89 -11% development properties in numbers Prices significant enough to boost market- Median Price $760K $599K 27% $700K 9% wide sales and prices overall. But Average Price $937K $756K 24% $951K -1% more aggressive pricing and the lack of low-priced inventory also Median PPSF $913 $904 1% $1,011 -10% generated some buyer resistance; the Average PPSF $954 $887 8% $1,028 -7% average days on market increased by Median Price by Bedroom two weeks compared to a year ago. Studio $510K $450K 13% $417K 22% 1 Bedroom $676K $630K 7% $645K 5% There were 17% more sales than a year ago, but the increase was 2 Bedroom $950K $997K -5% $1.075M -12% due entirely to closings in new 3+ Bedroom $1.830M $1.540M 19% $2.020M -9% developments. The number of large- scale development properties that commenced closings this quarter doubled versus Second Quarter 2016. Meanwhile, resale co-op sales were 6% lower year-over-year and resale CLOSED SALES 1,800 condo activity was unchanged. While price metrics in many Brooklyn 1,500 neighborhoods backed off from s the highs seen during First Quarter, 1,200 Sale there were still strong year-over-year ed increases in all market segments. Clos 900 of Driven by new development sales, er the market-wide average price of mb 600 $937,000 was the second-highest Nu seen since 2008; median price 300 climbed 27% year-over-year to 0 11 11 11 11 12 13 14 15 16 17 10 12 13 14 15 16 12 13 14 15 16 17 10 12 13 14 15 16 $760,000, topping last quarter’s high 1Q 2Q 3Q 4Q 1Q 1Q 1Q 1Q 1Q 1Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q 3Q 4Q 2Q by 9%. The Corcoran Group I p 3 BROOKLYN CORCORAN REPORT Market Wide 2Q 2017 Sales Brooklyn 2Q17 2Q16 % Chg (yr) 1Q17 % Chg (qtr) There were 1,459 closings in Brooklyn Overview this quarter, 17% higher than last year Total Sales 1,459 1,248 17% 1,456 0% and the second highest number of Resale Co-ops 520 551 -6% 564 -8% closings during any second quarter Resale Condo 510 508 0% 447 14% since 2010. The number of sales during New Development 430 189 127% 445 -3% Second Quarter 2017 was also 25% Contracts Signed 1,186 1,036 14% 1,016 17% above the seven-year historical average. Days on Market New development closings led the Average Days on Market 79 65 22% 89 -11% increase in market wide sales as resale Days on Market by Type condo sales were level year-over-year Resale Co-ops 83 69 20% 89 -6% and resale co-op sales actually fell 6% Resale Condo 76 61 24% 90 -16% versus the same period. The increase Days on Market by Bedroom in new development introductions Studio 65 68 -6% 82 -22% throughout the borough in the last few 1 Bedroom 75 68 10% 95 -21% years, several of which were ready for 2 Bedroom 84 60 40% 86 -2% occupancy in recent months, enticed 3+ Bedroom 85 69 23% 90 -5% some Brooklyn buyers to buy in new Days on Market by Price developments. The new development market captured its second highest Under $350K 103 106 -3% 125 -18% market share of buyers in nearly five $350K to $500K 102 78 31% 100 2% years. Falling inventory in the resale co- $500K to $750K 75 56 34% 70 7% op market likely played a role in fewer $750K to $1M 59 48 22% 89 -33% resale co-op sales this quarter. $1M to $2M 66 60 10% 82 -19% $2M+ 103 84 22% 79 30% DAYS ON MARKET BY PRICE 120 Note that days on market statistics are 100 Days on Market 80 The length of time between list date and only based on resales as many new 60 development residences are sold before 40 sale date in Brooklyn increased by two being officially listed. 20 weeks compared to last year. Market 0 Under 350K 350K-500K 500K-750K750K-1M 1M-2M 2M+ exposure time for both resale condos DAYS ON MARKET and co-ops expanded by double-digits, 240 Reported signed contract activity rose likely due to rising prices. By bedroom 210 14% year-over-year, in contrast to type, studios were the only category to 180 what was experienced in Manhattan, sell faster than during Second Quarter 150 where activity was actually lower than 2016. Larger residences took the longest 120 a year ago. Every Brooklyn submarket time to find buyers. Apartments priced 90 experienced an annual increase in between $750K and $1M were the fastest 60 contract activity. selling price category of the quarter, at 30 59 days, followed by apartments priced 0 between $1M and $2M. 1Q11 2Q11 3Q11 1Q12 1Q13 1Q17 1Q15 4Q11 1Q16 1Q14 2Q13 2Q17 2Q12 3Q12 2Q15 3Q15 2Q16 3Q16 4Q12 4Q13 2Q14 3Q10 4Q10 4Q15 4Q14 3Q13 4Q16 3Q14 The Corcoran Group I p 4 BROOKLYN CORCORAN REPORT Market Wide 2Q 2017 Inventory All Sales 2Q17 2Q16 % Chg (yr) 1Q17 % Chg (qtr) Following the most recent inventory peak in Inventory Second Quarter 2011, inventory subsequently Market Wide 1,723 2,234 -23% 2,063 -16% declined year-over-year through Second Resale Co-ops 632 963 -34% 878 -28% Quarter 2014. Since Third Quarter 2014, Resale Condos 604 872 -31% 689 -12% inventory rose during nine of the past twelve New Development 487 399 22% 496 -2% quarters. However, so far in 2017 buyers Months of Supply have experienced constricted inventory in Market Wide 3.8 5.1 -25% 4.7 -20% Brooklyn, particularly at the low-end and Resale Co-ops 4.8 4.7 2% 4.9 -3% in the resale co-op market. The year-over- Resale Condos 5.0 5.0 0% 4.3 19% year decrease accelerated during Second New Development 4.2 6.4 -34% 5.2 -19% Quarter 2017, declining 23% versus the same period a year ago. The low supply is due to resale listings as new development inventory actually grew compared to last year. In order ANNUAL CHANGE IN INVENTORY BY PRICE to meet the demand for home-ownership in Brooklyn, new development properties are $2M+ becoming more common in neighborhoods $1M–$2M that historically did not offer much in the way $750K–$1M of new product. New development listings increased 22% from a year ago yet not by $500K–$750K nearly enough to boost the market wide $350K–$500K inventory figure. Under $350K Market share of listings priced under -60% -50% -40% -30% -20% -10%0%10% $750,000 shrank versus last year, a trend seen in Brooklyn during the past several quarters. During Second Quarter 2017, LISTED CO-OP & CONDO INVENTORY apartments priced over $2M was the 4,000 only price category to have an increase in 3,500 number of listings compared to a year ago. 3,000 Months of Supply Based on sales during the last year and 2,500 current listed inventory levels, Brooklyn units 2,000 ed st has 3.8 months of supply. This figure Li 1,500 indicates an under-supplied market and is lower than last year’s figure, which was 1,000 5.1 months in Second Quarter 2016. With 500 the increase in sales and reduction in inventory, the market remains extremely 0 1Q11 1Q12 1Q13 1Q15 1Q17 2Q11 3Q11 4Q11 1Q14 1Q16 1Q10 2Q12 3Q12 2Q17 tight. All market segments are under- 2Q10 3Q10 4Q10 4Q12 2Q13 3Q13 4Q13 2Q14 3Q14 4Q14 2Q15 3Q15 4Q15 2Q16 3Q16 4Q16 supplied in Brooklyn. New developments Condo Co-op have the lowest months of supply, down from being in equilibrium last quarter. The resale condo market months of supply figure was unchanged versus a year ago. The Corcoran Group I p 5 BROOKLYN CORCORAN REPORT Market Wide 2Q 2017 Prices Brooklyn 2Q17 2Q16 % Chg (yr) 1Q17 % Chg (qtr) Second Quarter 2017 was a strong Prices quarter for sale prices in Brooklyn. Median Price $760K $599K 27% $700K 9% Average and median price grew Average Price $937K $756K 24% $951K -1% year-over-year to register the fourth Median PPSF $913 $904 1% $1,011 -10% consecutive quarter of double-digit Average PPSF $954 $887 8% $1,028 -7% annual price growth.