Single-family builders and multifamily developers both built a lot of luxury product over the last several years to shore up profit margins that were threatened by rising labor and materials costs. The effect of that method is showing most blatantly in NYC's hottest borough.
In a third quarter market report on Brooklyn from Corcoran Real Estate, the average price on a new for-sale development was up 69%, from $1.011 million in third quarter 2015 to $1.713 million in third quarter 2016. New development sales, however, were down 5% from the same period last year and down 33% from last quarter.
After nearly three years of declining inventory since the peak in second quarter 2011, available inventory increased year-over-year for eight of the nine past quarters, the Corcoran report shows. There were 2,236 listings available during third quarter 2016, 7% more than last year. The year-over-year increase was driven by resale condo and new development listings, as resale co-op inventory was 3% lower. This is the fifth consecutive quarter of annual co-op inventory decline.