Brooklyn’s townhome market is red hot. If you are looking to purchase, be prepared. Inventory has dropped 42% over the past year as buyers scooped up properties, driven by lifestyle changes brought on by the pandemic-induced shutdowns. Supply is nearing record lows, with just 4.8 months of supply borough-wide, indicating a market that now favors sellers.
The townhome market in Brooklyn is one of the most active segments across the city and closely mirrors what we see on a national level: tight supply, bidding wars, and appropriately priced homes selling within days. Sellers should be prepared to move quickly once their home is listed, and buyers should be ready for stiff competition.
While demand for these homes has always been strong, the pandemic pushed their desirability to new heights. A high volume of trades has occurred throughout the borough since the start of the year. While demand is likely to remain strong, the velocity of trades will slow, due to a lack of available homes to purchase.
As of this writing, there are 1,287 townhomes for sale across Brooklyn, down from 2,206 this time last year.
The greatest supply drop was in Northwest Brooklyn, where supply fell 61% from 462 homes for sale to 182 currently. Northwest Brooklyn is home to the most expensive real estate in Brooklyn, and its close proximity to Manhattan, along with lower density neighborhoods, makes it highly desirable. The lowest level of supply is in Northwest Brooklyn, with just 3.3 months of inventory.
North Brooklyn reported the next greatest supply drop, with the number of active listings falling 43% from this time last year to 126 properties. Still, the neighborhood tied for the greatest level of supply, at 5.4 months, indicating a market that is beginning to favor sellers, but is relatively balanced. East Brooklyn saw the next greatest supply drop, with inventory falling 41% to 241 listings. East Brooklyn continues to attract a wide range of purchasers, from speculative investors to owner-occupied homes. The submarket is one of the most rapidly transforming areas across the entire city.
South Brooklyn reported the smallest supply drop, down 34%. However, this is the largest market for homes, with 738 properties currently listed for sale. The supply level tied North Brooklyn, with 5.4 months, signaling the market is relatively balanced, if not slightly favoring sellers.
While the greatest supply crunch is in the submarket of Northwest Brooklyn, some neighborhoods face even greater constrictions. The lowest level of supply is in Prospect Park South, where there is just 1.3 months of supply, followed by Flatbush where there is 2.1 months of supply, and Fort Greene where there is 2.3 months’ supply.
Other neighborhoods in Northwest Brooklyn that made the top ten tightest supply, driven by a surge in demand, include Windsor Terrace (2.5 months), Boerum Hill (2.5 months), Prospect Heights (2.7 months), Cobble Hill (2.8 months), and Park Slope (2.9 months). Bedford-Stuyvesant, in East Brooklyn, also only has 2.9 months’ supply.
Notably, Bedford Stuyvesant and Park Slope have seen the most property trades so far this year, with 213 and 135 transactions, respectively. The next three most popular destinations (in order) are Sheepshead Bay (95), Marine Park (91), and Bushwick (89).
On the opposite end of the spectrum, there are still opportunities to purchase in neighborhoods with a supply gut. The greatest level of supply relative to demand is in Manhattan Beach, where they are 20 months’ worth of homes for sale. Borough Park, Coney Island, Bergen Beach, Ocean Hill, and Brighton Beach round out the top five neighborhoods with the greatest level of supply relative to demand. Buyers looking in these markets will have more purchasing power and are less likely to encounter bidding wars.
How much will it cost?
Depending on the neighborhood, the price of entry varies greatly. Northwest Brooklyn is home to some of the most expensive neighborhoods, while more affordable properties are found throughout South Brooklyn.
The costliest townhome neighborhood, with a median sale price of $5,800,000 is Brooklyn Heights. It is known for its low-rise architecture and its many brownstones, most of them built prior to the Civil War. A large part of Brooklyn Heights is protected from new development through the Brooklyn Heights Historic District, the first such district in New York City. The district was added to the National Register of Historic Places in 1966. These reasons, along with its proximity to Manhattan, make it the most expensive townhome neighborhood in the borough.
Closely following are DUMBO, Cobble Hill and Carroll Gardens, all of which are in Northwest Brooklyn and neighbor Brooklyn Heights. These neighborhoods, along with Fort Greene, all have median sale prices topping $3 million.
Other neighborhoods in the top ten include Boerum Hill, Park Slope, Clinton Hill, Prospect Heights, and Prospect Park South.
If you are seeking out more affordable properties, head to South Brooklyn. The most affordable neighborhood, with a median sale price of $565,000, is Coney Island. The neighborhood, home to the world-famous Luna Park, offers residents a seaside retreat that feels a world away from Manhattan, while still remaining accessible via several subway lines.
The next most affordable neighborhood is Brownsville in East Brooklyn, where the median sale price is $585,000. The neighborhood is just east of Crown Heights and has seen an uptick in demand as buyers look further into the borough. Other affordable options include Flatlands, Wingate, Brighton Beach, East Flatbush, East New York, and Marine Park.