Housing prices were up one percent last quarter in Cobble Hill, the only Brooklyn neighborhood to see an increase. Across Brooklyn, the average housing price fell 18 percent, according to data from HMS Associates, a Brooklyn-based real estate appraisal firm.

New York, N.Y., July 6, 2009 – The average Brooklyn home price declined 18 percent in the second quarter of 2009 compared to the same period last year, but sales volume picked up slightly in the second quarter compared to the first quarter of 2009, according to Brooklyn-based real estate appraisal firm HMS Associates.

The average home price in Brooklyn during the second quarter of 2009 was $548,560, 18 percent less than $670,419 in the same period last year, the HMS report showed.

There were a total of 545 sales during the second quarter of 2009, an 8 percent increase in activity over the first quarter of 2009.

“Prices continued to decline, which is no surprise, but there was a slight pickup in the sales activity from the first quarter to second quarter of this year so far,” said Sam Heskel, an appraiser and executive vice president of HMS Associates. “Because sellers have been more realistic and prices have come down, we are seeing more activity as buyers feel more comfortable making offers.

 “This could indicate that the market is bottoming out and that the downward trend is approaching its end,” Heskel said.

Volume is still dramatically down from last year, HMS reported. The 545 sales in the second quarter of 2009 is 52 percent less than the same period last year, when there were 1,145 sales.

The price drop was consistent in virtually every neighborhood in Brooklyn, marking a difference from just a few months ago when the borough’s average price fell but some neighborhoods were still seeing modest price increases, the HMS report showed.

In Carroll Gardens/Cobble Hill, where prices were still increasing last quarter, the average home price was just 1 percent higher compared to the same period last year, and sales volume was down 62 percent. In Greenpoint, which also showed price increases last quarter, the average home price dropped 20 percent and sales volume was down 15 percent.

“If you are able to come up with the financing, there is a lot of inventory out there and lower prices in neighborhoods that are still very strong, so it can be a good time to buy,” Heskel said.

The home price figures and sales volume come from HMS’s comprehensive quarterly study of 15 representative neighborhoods in Brooklyn and include one-, two-, three-, and four-family homes, condos, and co-ops.  The neighborhoods included in the report together are deemed a fair reflection of what is happening in the Brooklyn real estate market as a whole, according to Heskel.           

Almost every neighborhood saw a price decline, the quarterly report showed. The only exceptions were Carroll Gardens/Cobble Hill, with its 1 percent increase to an average home price of $933,438 and Fort Greene, where the average home price remained statistically the same at $911,538.

The steepest price declines were in Dumbo/Downtown Brooklyn/Boerum Hill, where prices fell 22 percent to $754,000, and Sheepshead Bay, where prices also fell 22 percent to $263,200, according to the report.

The complete report will be posted at http://www.hmsassociates.net/marketingreports.cfm

Our recent press release on the end-of-year Brooklyn report:

New York, N.Y., January 15, 2009 – The year 2008 saw average Brooklyn home prices inch up a mere 2 percent in an otherwise bleak landscape as sales volume dropped by one third, with no signs of picking up in the coming months, according to Brooklyn-based real estate appraisal firm HMS Associates. 

“We are now seeing a very pronounced continuation of the trend from the third quarter of 2008, with more inventory sitting on the market and not moving,” said Sam Heskel, founder and executive vice president of HMS Associates. “When you look at fourth quarter numbers separately, the drop-off is even more dramatic.”

For the fourth quarter, the number of Brooklyn properties sold fell 57 percent to 532 properties, down from 1,250 in the fourth quarter of 2007, according to the HMS study. Likewise, in the fourth quarter the average Brooklyn home price was down 2 percent to $670,000 from the average price of $680,000 in the fourth quarter of 2007. 

The average home price figures come from HMS’s comprehensive quarterly study of 15 representative neighborhoods in Brooklyn and include one-, two-, three-, and four-family homes, condos, and co-ops. The report includes neighborhoods that show both price increases and decreases and are deemed together a fair reflection of what is happening in Brooklyn as a whole, according to Heskel. 

While the average price boroughwide dropped two percent in the fourth quarter, neighborhood by neighborhood sale prices varied.  They were up in Brooklyn Heights, Carroll Gardens, Bay Ridge, and Sunset Park but fell in Boerum Hill/Cobble Hill, Crown Heights, and Marine Park, Heskel said.  The number of homes sold fell in all 15 neighborhoods, with the biggest drops in Boerum Hill/Cobble Hill, Brooklyn Heights, Clinton Hill, Fort Greene, and Bay Ridge.

The picture was much bleaker in some neighborhoods not included in the study, such as Bedford-Stuyvesant, East New York, and Brownsville.  In these three neighborhoods, there were 16 foreclosures among one- to four-family homes in the fourth quarter – one for every five home sales. For the full year 2008 in East New York, as one of the most dire examples, prices for one- to four-family homes dropped more than 6 percent from 2007, while the number of such homes sold fell 56 percent. 

“Unfortunately the Brooklyn neighborhoods that are in the weakest economic positions to weather a downturn are getting slammed the hardest as the real estate market continues to slow down,” Heskel said.

Heskel noted one bright spot in the equation: The market favors buyers with good credit and adequate cash.

“At this point properties are priced to move, and buyers with good credit and cash reserves will be able to secure financing at good interest rates,” Heskel said.

Below please find a summary of a news release that HMS put out today.  Your thoughts are welcome as always on a topic that has all of the local market talking:

As the average Brooklyn home price dropped two percent to $695,285 in the third quarter of 2008 from $708,457 in 2007, it has become a buyer’s market, with more inventory out there and sellers being forced to bring prices down to get property to move. This does not downplay the difficulty of getting financing in this tighter credit market, but if a property is priced well and the buyer has good credit and a decent income, the market right now favors the buyer.
The number of Brooklyn properties sold rose one percent from 988 to 999.
The two percent price drop in Brooklyn in the third quarter compares with an eight percent rise in the second quarter of ‘08 and a three percent increase in the first quarter of this year.

While the average price boroughwide dropped two percent, neighborhood by neighborhood sale prices varied. They were up in Brooklyn Heights and Prospect Heights but fell in Sheepshead Bay, Greenpoint, and Park Slope.  The number of homes sold rose in Carroll Gardens, Williamsburg, and Marine Park but dropped substantially in Greenpoint, Fort Greene, and Brooklyn Heights.
In three neighborhoods not included in the study, Bedford-Stuyvesant, East New York, and Brownsville, site of numerous apparent turnovers, flips, and subprime loans, the picture was bleaker.  Here there was a 50 percent decline in housing sales during a recent six-month period because of tighter lending standards.  A recent CNN/Money report named Bed-Stuy as among neighborhoods with the highest foreclosure rate nationally.
Single family home prices across all neighborhoods studied fell from $738,000 to $734,000, four-family homes rose from $1,212,000 to $1,423,000, co-ops fell from $557,000 to $492,000, while condos were up from $657,000 to $687,000.
What’s happening in Brooklyn reflects the Manhattan market.  Wall Street layoffs and smaller year-end bonuses are having an impact on the Manhattan market, and that means Brooklyn prices will continue to come down as well. You’ll have fewer Manhattan clientele coming to Brooklyn because Manhattan prices are lower too.

As we all know by now, the last few days were ones that none of us could have ever predicted.  After the meltdown of four major U.S. financial institutions, the American people now shift their focus onto the stock market.  Following the House Republican leader John Boehner’s opposition last friday to the Bush Administration’s proposed $700 billion rescue plan, Boehner created a compromise plan which was rejected.  This in turn caused a catastrophic drop in the stock market, as sell-offs took place within minutes.  The Dow Jones industrial average lost 777 points that making it the largest single-day drop ever.  Boehner expected flack from the Democrats, but he is even facing doubt from within his own party.  Earlier the U.S. Senate passed an updated version of the bill, which holds incentives for the House, thus hoping they will authorize it.  With the titanic dive of the Dow resulting from past opposition, the Government is putting all bets on this bill’s approval, for the economic situation is in desperate need of stability. 

For those of us who celebrated the Jewish New Year over the last two days, we could pray and hope that by next year at this time things will have improved considerably.  There are many variables that will contribute to whether we see any significant type of recovery during this period.  Who occupies the Oval Office combined with what support we get from foreign markets and a whole bunch of other factors that we’ll continue to analyze in this blog.

Returning our focus for a moment to the issue of real estate, I would also like to turn your attention to a article I wrote for the New York Real Estate Journal on the related topic of the Brooklyn residential market.