Brooklyn’s real estate market in 2026 just handed buyers something they have not had since 2021: real negotiating power. If you have been watching the Brooklyn real estate market in 2026, the January numbers tell a clear story. Contracts dropped, days on market ticked up, and listing discounts are widening. That does not mean prices are crashing. It means the window to negotiate is open right now, and it will not stay open once spring inventory hits.
Here is what the data actually shows and what smart buyers and sellers should do about it.
In This Guide
The Numbers: What Changed in January 2026
Let’s break it down with the raw data. Brooklyn’s January 2026 market data paints a very different picture from what we saw a year ago.
| Metric | January 2026 | Change (YoY) | Change (MoM) |
|---|---|---|---|
| Contracts signed | Lowest since 2021 | -11.3% | -15.8% |
| Median days on market | 68 days | +7.9% | +9.7% |
| Active listings | 2,926 | +0.9% | +0.5% |
| Listing discount | 3.6% | Widening | Widening |
| Median price/sq ft | $994 | -0.3% | -2.5% |
The headline number is the contract drop. A 15.8% decline from December and 11.3% from the prior year puts January 2026 at the lowest monthly contract volume Brooklyn has seen since 2021. That tells us buyers are being selective, not desperate.
At the same time, months of supply sits at about 4.5 months. Below six months still technically favors sellers, but the trend is moving toward balance. And when combined with a 3.6% listing discount (meaning homes sell for about 96.4% of the last asking price), sellers are giving ground they did not have to give 12 months ago.
Why Contracts Are Falling
Three forces are driving Brooklyn’s contract slowdown in the 2026 real estate market.
Mortgage Rates Still Sting
Rates sit at 6.23% as of early February 2026 (Bankrate national survey, Feb 4). That is down from mid-2024 peaks, but still roughly double what many existing Brooklyn homeowners locked in during 2020-2021. The result: a standoff. Buyers can afford more than they could in 2023, but not enough to bid aggressively. And sellers with sub-4% mortgages are reluctant to list, which limits new supply even as demand cools.
Holiday Hangover Meets Rate-Lock Gridlock
January is always Brooklyn’s slowest month. But this January was slower than usual because many buyers who signed in Q4 2025 pulled forward their purchases to lock rates before a potential year-end spike. That left fewer active shoppers entering 2026. Combine that with the rate-lock effect (sellers unwilling to trade a 3% mortgage for a 6% one), and you get fewer listings and fewer contracts at the same time.
Buyer Psychology Has Shifted
After years of “buy now or miss out” messaging, many Brooklyn buyers have adopted a wait-and-watch posture. Fannie Mae projects rates dropping to 5.9% by year end. That forecast gives fence-sitters a reason to hold, even if waiting means competing with a larger buyer pool later. The smart play? Acting now while the competition is thin, rather than later when rates drop and everyone else jumps in.
Where the Deals Are: Brooklyn Neighborhoods Heating Up
Not every Brooklyn neighborhood is cooling equally. StreetEasy recently named several neighborhoods as “hot” for 2026 based on surging search interest and buyer activity:
Buyer-friendly (more inventory, price reductions):
- Bushwick is seeing the biggest jumps in inventory and price cuts
- East New York continues to attract first-time buyers with lower entry points
- Crown Heights has softening prices despite strong long-term fundamentals
Still competitive (high demand, limited supply):
- Windsor Terrace and Carroll Gardens were flagged as “hot” by StreetEasy with surging interest
- Fort Greene and Downtown Brooklyn benefit from new development momentum and the planned IBX light rail line
- Park Slope and Bay Ridge remain family favorites with strong school districts and low turnover
The takeaway for Brooklyn apartment and house hunters: the borough-wide averages mask real neighborhood-level variation. A buyer in Bushwick faces a very different market than one in Carroll Gardens.
What This Means for Brooklyn Buyers
If you are looking at Brooklyn real estate in 2026, here is your playbook:
1. You have negotiation room. A 3.6% listing discount means sellers are accepting offers below ask. On a $900,000 property, that is roughly $32,000 off. Start your offers at 5-7% below ask on properties that have been listed for 45+ days.
2. Ask for concessions. With days on market at 68 and rising, sellers are more open to covering closing costs, offering seller concessions, or agreeing to repair credits. This was almost impossible in 2022-2023.
3. Get pre-approved now, not later. When rates eventually do drop, the buyer pool will flood back in. Buyers who have their mortgage pre-approval ready can move fast when rates dip, while unprepared buyers will be stuck scrambling.
4. Look at co-ops. Manhattan co-op contracts fell 15% in January 2026, and Brooklyn co-ops are following a similar pattern. Unrenovated co-ops (so-called “TLC properties“) are sitting longer. If you are willing to renovate, you can buy well below comparable condo prices.
5. Consider the bridge neighborhoods. Buyers priced out of Park Slope are finding similar walkability and transit access in Kensington, Ditmas Park, and Greenwood Heights at 15-25% lower price points.
What Brooklyn Sellers Need to Do Right Now
The data does not mean you should panic. It means you need to be strategic. Here is what works in this market:
Price correctly from day one. Homes priced at or slightly below market value are still moving in 2-3 weeks. Overpriced listings linger past 60 days and then require price cuts that signal desperation. The 3.6% listing discount mostly reflects sellers who started too high.
Stage and present. In a market where buyers have choices, presentation separates your listing from the competition. Professional staging and quality photography are no longer optional.
Be flexible on terms. Offering to cover a portion of closing costs or providing a rate buydown credit can make your property stand out without dropping the headline price.
Price for the spring surge. If your property is not yet listed, target mid-March to early April. Brooklyn historically sees its strongest buyer activity from March through June. Listing now while inventory is lean puts you ahead of the spring wave.
Brooklyn Real Estate Market 2026: Spring Outlook
What does the Brooklyn real estate market 2026 look like heading into spring? Here are the three most likely scenarios based on current data:
Scenario 1: Rates drop to ~6.0% by May (most likely). Buyer activity rebounds, contracts increase, and DOM drops back to 55-60 days. Sellers benefit from renewed urgency but still face more negotiation than 2022-2023. This is the consensus view from Fannie Mae and the NAR.
Scenario 2: Rates stay above 6.2%. The current buyer-friendly pattern extends into summer. Listing discounts could widen to 4-5%, and slower-moving neighborhoods see deeper price cuts. Sellers who price correctly still close, but overpriced listings languish beyond 90 days.
Scenario 3: Inflation reaccelerates and rates spike. If tariff impacts or energy prices push inflation back up, the Fed could pause cuts and rates could tick back toward 6.5-6.7%. This would freeze both buyer and seller activity, extending the current standoff.
For buyers tracking the Brooklyn real estate market in 2026, scenario 1 is the most likely outcome. That means your negotiation window is narrowest right now, between now and when spring inventory and lower rates bring competition back.
Brooklyn Neighborhood Prices: February 2026 Quick Reference
| Neighborhood | Median Price | YoY Change | Buyer Opportunity |
|---|---|---|---|
| Bushwick | $820K | -1.2% | High (inventory rising) |
| East New York | $585K | +2.8% | High (lowest entry point) |
| Crown Heights | $950K | +0.5% | Moderate (price stabilizing) |
| Bay Ridge | $780K | +5.1% | Low-moderate (family demand strong) |
| Park Slope | $1.55M | +3.2% | Low (perennial demand) |
| Windsor Terrace | $1.3M | +4.0% | Low (StreetEasy “hot” market) |
| Carroll Gardens | $1.8M | +2.9% | Low (limited inventory) |
| Downtown Brooklyn | $1.1M | +3.6% | Low-moderate (development pipeline) |
| Kensington | $945K | +1.8% | Moderate (Park Slope overflow) |
| Fort Greene | $1.4M | +2.1% | Low-moderate (IBX rail proximity) |
Buyers who want the best combination of price, upside, and negotiation room in the Brooklyn real estate market for 2026 should focus on Bushwick, East New York, and Crown Heights. These three neighborhoods offer entry points 30-50% below the borough median while benefiting from the same transit connectivity and development investment.
The Bottom Line
Brooklyn’s real estate market in 2026 is not crashing. It is normalizing. Contract volume is down, homes sit a little longer, and buyers have more room to negotiate than they have had in years. For sellers, the math still works if you price right and present well. For buyers, this is the rare stretch where you can shop without the pressure of bidding wars and waived contingencies.
The window is open. It will not stay open once rates drop and spring demand kicks in.
Browse Brooklyn homes for sale or talk to a DeFalco agent about your Brooklyn search today.
Frequently Asked Questions
Is Brooklyn a buyer’s market in 2026?
Brooklyn is shifting toward buyer-friendly conditions as of early 2026, though it is not a full buyer’s market by traditional measures. The months of supply sit at roughly 4.5 (under the 6-month threshold that defines a strict buyer’s market). What has changed is buyer negotiating power. With contracts at their lowest since 2021, listing discounts averaging 3.6%, and days on market pushing past 68, buyers have more negotiation power than at any point since the pandemic recovery. Well-prepared buyers with pre-approval can extract concessions and price reductions that were off the table 12-18 months ago.
Are Brooklyn home prices going down in 2026?
Prices are softening at the margins but not falling sharply. The median price per square foot dipped 0.3% year-over-year and 2.5% month-over-month to $994 in January 2026. That is a stabilization, not a correction. Desirable neighborhoods like Windsor Terrace and Carroll Gardens still see strong demand. The biggest price adjustments are happening in neighborhoods with rising inventory, such as Bushwick and parts of Crown Heights, where sellers who overpriced are cutting 5-8% after 45+ days on market.
Should I wait for lower mortgage rates to buy in Brooklyn?
Waiting for rates to drop carries a hidden cost: competition. Fannie Mae projects rates reaching 5.9% by year-end 2026. When that happens, more buyers will re-enter the market, driving up prices and reducing the negotiation window. Right now, with fewer buyers competing, you can secure a lower purchase price and refinance later when rates decline. A common saying in real estate applies here: “marry the house, date the rate.” The purchase price you lock in today will not change, but your rate can always be refinanced.
What are the best Brooklyn neighborhoods to buy in 2026?
It depends on your budget and priorities. For value and upside, Bushwick, East New York, and Crown Heights offer the most negotiation room and lower entry points. For families wanting top school districts and walkability, Park Slope, Bay Ridge, and Windsor Terrace remain strong despite higher prices. For transit access and new development, Downtown Brooklyn and Fort Greene are benefiting from the planned IBX light rail project. For investors, neighborhoods near the Gowanus Canal rezoning area offer long-term upside as new residential and mixed-use projects deliver over the next 3-5 years.