By Al Barbarino
Declines in residential inventory in Manhattan, Brooklyn and Queens have caused significant price increases over the last year, giving sellers a confidence boost.
Manhattan inventory dropped 19.1 percent, from 1,464 to 1,184, as year-over-year median pricing increased 15.4 percent to $1.5 million, according to the June 2012 New Development Report from StreetEasy.
“Low inventory is having a big impact on rising prices,” said Sofia Song, VP of research at StreetEasy, adding that a 33 percent decline in price cuts reflects the emboldening of sellers.
There were 139 price cuts in June, compared with 207 last year.
“Price cuts are a very good indication of seller confidence,” Song said. “When there are fewer price cuts it’s pretty obvious that sellers don’t feel the need to cut prices in order to attract buyers.”
Median prices in June ranged from $3.38 million in the Upper West Side; $2.24 million on the Upper East; $1.95 million in Midtown; and $1.45 million Downtown; to $542,000 in Upper Manhattan, according to the data.
Midtown logged the greatest price increase, jumping 64 percent to $1.95 million, as inventory dropped 30.5 percent, from 226 to 157.
A similar trend was amplified in Brooklyn, where inventory plummeted 44 percent, from 676 to 378, and prices increased 23.2 percent to $762,000.
Williamsburg, which skewed the Brooklyn data heavily, was the most extreme case of the trend, as inventory fell by nearly 67 percent, from 144 to 48, and pricing more than doubled, from $687,000 to $1.42 million. There were no new contracts in June, compared with 7 last year.
But an inventory boost lies ahead in 2013 and 2014, as new projects start begin to come on line, Song said.
“There’s just been so much pent up demand there because people have been waiting to purchase,” she said. “Right now we have very little product, but the pipeline is definitely going to come back.”
Williamsburg blew away pricing in Park Slope and Downtown Brooklyn, where median prices topped out at $796,000 and $748,000, respectively.
Queens saw the smallest inventory drop, at five percent; but median prices still increased by roughly 20 percent to $625,000.
BoCoCa (Boerum Hill, Cobble Hill, Carroll Gardens) and Flushing, Queens were the only neighborhoods to experience spikes in inventory. BoCoCa prices fell five percent. Interestingly, Flushing prices increased 29 percent, to $645,000, despite an inventory jump from 23 to 54.