Brooklyn real estate market shows signs of imbalance as demand falters

In June 2025, the Brooklyn real estate market is facing significant changes influenced by various economic factors. The market is marked by rising supply and record rents, which contrast with a lack of demand, particularly in the under-$2 million segment. This segment saw a 4% decrease in buyer interest compared to the previous year, further highlighting the cautious approach of potential buyers following a challenging 2024 year. Interestingly, the luxury segment of real estate, specifically properties over $2 million, has experienced a notable increase in demand by nearly 13% from last year. This uptick suggests a slight recovery in that market area, driven more by stable price growth rather than a sudden rush to sell. However, overall demand remains flat, indicating that for most buyers, particularly those looking for more affordable options, skepticism prevails. Brooklyn's Pulse index, which gauges the ratio of demand to supply in the housing market, shows its lowest reading in five years, having dropped 2.8 points year-over-year. This indicates an imbalance that underscores the mixed environment of the current market. Despite these challenges, the median sales price in the second quarter stands at $1,024,400, suggesting that while supply is increasing, prices are resilient due to varying buyer motivations. Additionally, the rental market is experiencing turbulence paralleling the sales market. Asking rents have achieved new highs, driven in part by inventory increases. However, this rise in asking rents clashes with a flat demand and a mixed market climate expected to continue into the summer. It appears that renters may increasingly consider flights to the sales market, although such movements are expected to be highly selective and not indicative of an overall market recovery. Buyers and sellers are advised to maintain realistic expectations as they navigate this transitional period in Brooklyn’s real estate landscape, which might be poised for a subtle transformation as new trends begin to emerge.