The soaring real estate market in Brooklyn and Manhattan has moved into Queens, according to a story in the Wall Street Journal and a Douglas Elliman market report released Thursday. The lowest inventory in eight years led to a 10.6 percent increase in the average Queens residential sales price during the second quarter as buyers sought a cheaper alternative to Manhattan and Brooklyn, said the report.
The borough’s average sales price was $441,417, up from $399,154 in the prior year. Inventory plunged 28.9 percent to $6,225 during the quarter, and brokers cited the lack of selection and increased demand as drivers behind the price increase. “We don’t have employment numbers that are robust enough to create enough churn. If you’re not getting the promotion, you’re not selling your place and you’re not moving,” said Michael Guerra, managing director of Douglas Elliman. As a result, fewer new listings were coming to market.
Demand has also been heightened because of low mortgage rates, which encourage more buyers to seek cheap financing. The 30-year fixed-rate mortgage was below 4 percent in the most of the second quarter, according to Freddie Mac. Higher rents can also encourage people to enter the sales market, but Guerra said that low availabilities meant many buyers were unable to find a suitable apartment. New York City’s overall average rent, excluding Staten Island, surpassed $3,000 per month last quarter. The median price for Queens one-bedrooms was $1,470, according to the Daily News, and Long Island City’s one-bedrooms were $2,500, as the neighborhood benefitted from its proximity to midtown Manhattan.
Long Island City’s new condo towers have also created new for-sale inventory that’s cheaper than Manhattan and parts of Brooklyn, which has spurred buyers who had never previously considered Queens to look in the area. “It’s clear that the population is increasing. There’s also development pressures in Astoria,” said Guerra, but he added that Long Island City still lacked retail and service options like dry cleaners. After a lift in Manhattan, prices are now rising throughout the New York City region, including in Queens, according to the Journal. “There are tons of buyers coming over from Brooklyn,” the Journal quoted one broker as saying.
Going forward, one of the best indicators of an increase in listing inventory would be improved local job growth, which could spur more people to sell their homes, said Guerra.
You can read more about Brooklyn stats here.