All those anecdotal reports of apartment buyers struggling—without success—to find a place in Brooklyn and of long lines snaking out the door at weekend open houses in the borough are true. Those tales of woe are reflections of a first-quarter apartment-market supply that was down a whopping 45% from year-earlier levels, according to a report out Thursday from Douglas Elliman.
“We’ve got historically low levels of supply, and given the low interest rates, we’ve got historically high levels of demand,” said Michael Guerra, managing director for Elliman in Brooklyn. “It’s kind of the perfect storm because it dovetails with a lack of new construction.”
The sales report showed the listing inventory falling to 3,325 from 6,092 a year earlier.
It’s the steepest year-over-year decline in the five years since Miller Samuel started tracking the numbers for Elliman. With supply short, prices are soaring. The median sales price in Brooklyn hit $515,000, up 14.4% from the first quarter of 2012.
“The Brooklyn market saw larger price growth than we saw in Manhattan,” said Jonathan Miller, CEO of Miller Samuel. “Clearly when you choke off supply, prices rise.”
The Manhattan sales data released last week by Elliman showed a 6% increase in the median purchase price.
Queens, meanwhile, saw a year-over-year slump in inventory of 26.6%, the largest in the eight years that Mr. Miller has been tracking it. In that borough, however, prices have remained stable.
Despite the declines in inventory, citywide, the number of apartment sales actually increased, hitting a total of 10,012 in the first quarter, up 11% the same period in 2012, according to the Real Estate Board of New York. REBNY reported that median prices in the city increased by 7% to $480,000.
While the supply of units to purchase is slim and getting slimmer, inventories in the rental market are heading the other direction. Elliman tracked a 7.9% increase in listings for Manhattan and Brooklyn rentals.