Home values in Brooklyn and Queens have never been higher. However, the market forces that drive pricing are undergoing systemic shifts that will likely temper future growth.

The median price in Kings County in the third quarter of the year was $808,000, according to a report released Thursday by brokerage Douglas Elliman. That was a record high and more than 2% more than at the same time last year.

The story was similar in Queens, where prices grew at nearly double Brooklyn's rate to land at a borough-record $573,000.

Both markets have been hitting price records for years, driven by low inventory and high demand. However, those two metrics have undergone important changes over the last 12 months. The inventory of homes for sale is still low—which is why records are still being set—but it is increasing. Brooklyn had nearly 1,300 more homes for sale during the third quarter than it had the year before, a more than 70% increase. And while sales activity is still high, it is decreasing. In Queens, for example, the number of homes that traded hands over the quarter fell by 5%.

"We have trends showing sales drifting lower and inventory drifting higher, so it is reasonable to assume we are not going to see record prices going forward to the degree we've been seeing," said Jonathan Miller, head of appraisal firm Miller Samuel, which prepared the report for Douglas Elliman.

The shifts are likely attributable to a number of factors. To start with, federal tax reform has made owning property in high-tax states more expensive, and many would-be buyers could wait to see how the math pencils out following tax season next spring. In addition, federal interest rates are going up. And lastly, wages have not increased anywhere near as much as housing costs in New York City since the Great Recession, and prices may be reaching a sort of threshold of what residents can afford.

"Across the region," Miller said, "2018 has been a period of change."