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Brooklyn Home Sales Plummet

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Eli Weiss

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Sales of newer condos off 40 percent annually; prices inch downward; North Brooklyn only bright spot.

Brooklyn home sales plummeted 38.2 percent annually in the third quarter to 2,298, according to a new report from brokerage Prudential Douglas Elliman and appraisal firm Miller Samuel. Condo sales dropped especially sharply year over year.

The Miller Samuel numbers cover closed deals in the three months ending Sept. 30, so the fallout from the Wall Street crisis of mid-September isn't immediately reflected. Still, the steep drops, a continuation of the reality on the Brooklyn ground from the summer, offer clues to that market going forward: fewer sales and falling prices.

Condo sales fell by 32.6 percent annually in the third quarter to 660, while the median sales price for a Brooklyn condo fell 4.5 percent from $529,490 last year to $505,493. Prices and sales among new-development condos fell severely--an 8.3 percent annual median price drop to $549,930 and a 40.5 percent sales drop to 361.

Prices and sales volume fell across every region in the borough except one: North Brooklyn, which includes Williamsburg and Greenpoint. The median home sales price there jumped to $641,497 in the third quarter, up 10.5 percent from the previous quarter and 6.9 percent from 2007. The median sales price in chi-chi Brownstone Brooklyn fell from $1,412,861 in the third quarter of 2007 to $1,312,500 this year, a 7.1 percent drop.

The median sales price for all Brooklyn was $510,000 in the third quarter, a 5.6 annual drop and a 2.9 percent quarterly one. The average home price was $575,287, a slight drop from last year and from last quarter. The inventory of unsold Brooklyn homes on the sales market rose over 11 percent quarterly to 7,103.

http://www.observer.com/2008/real-estate/home-sales-plummet-brooklyn

elliman-3Q-chart.jpg
 
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Eli Weiss

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Brooklyn Home Prices Drop as Banks Cut Jobs and Curb Lending

By Kathleen M. Howley

Oct. 16 (Bloomberg) -- Brooklyn home prices tumbled 5.6 percent in the third quarter as Wall Street job losses reduced demand for real estate in the New York borough across the East River from lower Manhattan.

The median sale price for a home in Brooklyn fell to $510,000 from $540,000 a year earlier, according to a report issued today by New York-based real estate appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate. The number of sales tumbled 38 percent to 2,298.

Unemployment and tighter credit standards are cutting demand for real estate in New York City, said Paul Purcell, a partner in real estate consulting firm Braddock & Purcell. New York City Comptroller William C. Thompson yesterday raised his forecast for job losses in the city's financial service industry to about 35,000 over the next two years, up from his earlier estimate of 25,000, as the U.S. economy worsens.

``It's getting tougher and tougher to get a mortgage in New York, even if you still have your Wall Street job,'' Purcell said in an interview. ``Most lenders have stopped counting bonuses as income, and for Wall Street workers, that's the bulk of their paycheck.''

Brooklyn, the most populous of New York's five boroughs, is known for distinctive neighborhoods that range in character from Greenpoint, where Polish is as common as English, to the Heights, where Wall Street titans live in brick townhouses overlooking their offices in downtown Manhattan. Brighton Beach, at the southern tip of Brooklyn, is called ``Little Odessa'' for its large Russian-speaking community, and Dumbo, or Down Under the Manhattan Bridge Overpass, is a mecca for artists and the galleries that sell their work.

`Wall-Street Driven'

``There are wonderful neighborhoods in Brooklyn that have boomed right along with Manhattan real estate, but they are both Wall Street-driven markets so they're not going to be able to escape the effects of what's happened in the last few days,'' Purcell said.

U.S. stocks yesterday plunged the most since the crash of 1987 on doubts the government plan to bail out banks will keep the economic slump from deepening. On Friday, the Dow Jones Industrial Average posted its steepest weekly slide in the history of the 30- stock average and the Standard & Poor's 500 Index capped its worst week since 1933.

Greenpoint and Williamsburg, located across the East River from Manhattan's East Village, were the only Brooklyn areas to see a rise in values. The median sale price in the two neighborhoods at the northern tip of the borough rose 6.9 percent to $641,497 from $600,000 a year earlier as sales fell 21 percent, according to the report.

The median price in south Brooklyn, including Brighton Beach, Coney Island, and Flatbush, tumbled 5.2 percent in the quarter to $465,000 and sales dropped 38 percent. East Brooklyn, including Bedford Stuyvesant, Bushwick and Ocean Hill, saw a 20 percent decline to $441,400 and sales plunged 45 percent.

The northwest region of the borough that includes Brooklyn Heights, Park Slope and Cobble Hill, had a 3.9 percent decline in the median price to $658,250. Sales dropped 40 percent.

http://www.bloomberg.com/apps/news?pid=20601103&sid=af8eGyLaXVbE&refer=news
 

Claude From NY

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No surprise, it was a given that Wall Street's problems would eventually translate into declining real estate market conditions for NYC. It took the '87 crash a couple of years to work its way through residential markets.

Question, you think these are just little rumblings or is a big tremblor on the way?
 

Eli Weiss

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Question, you think these are just little rumblings or is a big tremblor on the way?

Well, the best way to figure this out, is by taking a neighborhood, consider the median income and what rental units go for in the area, then check if the mortgage payment on X amount is sustainable.

I think most areas are in huge bubble that is about to burst, I know NYC will be the last to pop and the first to come back, but the come back will be slow and take years, I think the next time we will see a 14,000 DOW is years away....the DOW bubble has already popped, but the air is still leaking....
 

Claude From NY

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Oh I agree. A twenty year uptrend line has been broken by this bear. There's no way to 14K. I just hope this 8k area holds, otherwise 6,000 is in the cards. Back to where Greenspan cited irrational exuberance.
 

Kevin Mc

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Huge issue with many Brooklyn neighborhoods is no stated loans. One of my biggest clients has many people looking to purchase in Bensonhurst,Bayridge,Bath Beach and Sunset Park. Large down payments, attractive interest rates etc....and not one lender willing to do stated income loans. I'm sure many other ethic areas are suffering the same fate.
 

MBD

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Question, you think these are just little rumblings or is a big tremblor on the way?

Everything that I am seeing now in New York happened 2 years ago in the area of South Florida that I worked. We were just beginning to notice a decline there in the middle of 2006. I saw it in Manhattan in the beginning of this year, and now in the high end areas of Brooklyn like Park Slope. The condo market is basically in the toilet. The property ladder has some broken steps and is falling.

In some neighborhoods, an increase in the mean sales price does not equate to increasing values. The numbers are skewed by the newer high-end condos, and they include sales concessions. You have to look at paired sales of similar properties.
 

Claude From NY

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In some neighborhoods, an increase in the mean sales price does not equate to increasing values. The numbers are skewed by the newer high-end condos, and they include sales concessions. You have to look at paired sales of similar properties.

Good point. I heard the same thing mentioned on a News Radio88 business report. Also mentioned that the numbers are skewed because many contracts on units in new buildings were six months to a year old. Current offerings will tell a good part of the story.
 

Kevin Mc

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Also mentioned that the numbers are skewed because many contracts on units in new buildings were six months to a year old. Current offerings will tell a good part of the story.

In many cases they easily exceed one year and are closer to two years old. From what agents @ the Developers Group have told me it is very building sensitive. Units along Bayard St. (overlooking McCarren Park) sold fairly briskly, whereas comparable unit sales several blocks away have been slow.
 
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