If we look at Brooklyn as a whole in 2011, the market is definitely picking up. Sales have jumped 17% since last year and the median sale price in the borough is up 14% as well. Those are some strong numbers. Some neighborhoods led the pack. Park Slope continues its climb as sales volume has increased a whopping 25% since last year, driving two-family home prices up nearly 2%.  Condos in Borough Park have gotten hot as well. Sales of these have more than doubled since 2010. Even the Williamsburg condo market continues to improve, with an 8.8% jump in price per square foot.

Of course, not every neighborhood can be so lucky. Canarsie decreased in all metrics, as the average sale price for two-family homes shrank 8%. Volume is also down 18.4%. It’s a similar story in Cypress Hills, where two-family home prices have fallen 12%. The possible reason for this dates back to the real estate bubble bursting in 2007. Now, tight-fisted banks don’t want to dole out mortgages so freely to lower income buyers, drying up the market in these areas.

These blemishes not withstanding, Brooklyn seems poised to recover from the recession soon. Prices and sales are up in many areas and we can expect to see this persist as the borough continues to be the sensible alternative to Manhattan. Let’s ride this momentum into 2012.

Every neighborhood has its official demarcation, defined by authorities like the building department, local government or assessors office. Counties, towns, villages, hamlets and such.

But there are also unofficial ties within those areas that blend them together in a way that forms a new cohesive unit. One jurisdiction flows into another, but not necessarily the whole of it. It happens all the time, but how do you really know where these intricacies are? Is it instinct, or just an intimate knowledge of your surroundings? Or both?

Sometimes, this can be based on simple demographics, or even proximity to activity centers, like schools, shopping and places of worship. But sometimes, the real reason why these subneighborhoods exist can’t be quantified. It’s not some tangible thing, more like a feeling of camaraderie between subsections of the populace. A likemindedness that links the area as a whole. This bond can be as tiny as a few blocks, but the effect is significant.

While anyone can spit out statistics, you have to read between the lines to understand the forces behind those numbers. When you read Published data on Market conditions, it doesn’t account for the nuances of each of these subneighborhoods.

Sure, the numbers may say the market in a certain town or city or county may be doing this or that, but there are some times when a relatively small area within the neighborhood that defies the statistics for different reasons.

No metric can measure “je ne sais quoi.”

Estate Attorneys  - Reduce needless squabbles between beneficiaries and expedite estate distributions. Get fast, accurate and court and IRS accepted date of death valuations.
    

Divorce Attorneys - Fair and reasonable appraisals are required to meet the terms of negotiated divorce settlements and court mandated distribution orders. We understand the stress that clients go through during divorce proceedings and deliver professional customer care.
  

Bankruptcy Attorneys  - A detailed and realistic appraisal can determine whether it is advisable to retain, refinance or forfeit a home or real estate asset.

Real Estate Attorneys - The starting point of any successful real estate transaction is knowing a properties true objective market value.  Sellers can avoid leaving “money on the table” and buyers can feel confident in their purchase offer price or have leverage to renegotiate. Without a reliable appraisal, clients are just speculating.

Portfolio Valuations - We can conduct valuation analysis on a completed portfolio of real estate assets for your and produce documents which will satisfy financial regulation authorities. We appraise portfolios up to $100 million and more in value.

Our reports are written for attorneys and their clients.  They’re NOT just conventional “run of the mill” appraisals using the standard mortgage forms that you have to dig through to find the information you need.

Call me personally, (Sam Heskel) at 1-866-467-5100 extension #102.  I would be happy to discuss with you your next appraisal project and why you should choose HMS to handle your most important and sensitive legal appraisal cases.

Brooklyn Home Sale Prices Decline 9% in 2009, According to HMS Associates; Results Vary Neighborhood by Neighborhood

BROOKLYN, NY–(Marketwire - January 6, 2010) - The year 2009 saw average Brooklyn home prices decline 9% as sales volume dropped by 26% with some positive gains in the third quarter, according to Brooklyn-based real estate appraisal firm HMS Associates. “Although we’ve experienced a slight increase in both average sales prices and overall volume in the third quarter of 2009 the numbers have reversed direction in the fourth quarter,” said Sam Heskel, founder and executive vice president of HMS Associates. “It may have been prematurely optimistic to think that the market is recovering.”

Coinciding with this fourth quarter decline was the jump in unemployment to 10.2% in October, the highest since early 1983. Experts had not anticipated the rate to climb this high before 2010. Chief Economist at Moody’s Economy.com, Mark Zandi, and Chief U.S. Economist at MFR Inc., Joshua Shapiro, now predict the rate to reach 11% later this year, a figure not seen since WWII. Unemployment is a major contributing factor in the housing market. If people are out of work they can’t afford to buy homes, qualify for financing or keep the homes that they do have, thus increasing the number of foreclosures and distressed sales. What we are seeing is no longer just a subprime mortgage crisis. Unemployment is affecting people from all neighborhoods; buyers who had good jobs with good credit are now defaulting on their mortgages as well. Thus if unemployment keeps rising, we cannot expect the real estate market to fully recover.

For the fourth quarter, the number of Brooklyn properties sold fell 20% to 824 properties, down from 1,035 in the fourth quarter of 2008, according to the HMS study. Likewise, in the fourth quarter the average Brooklyn home price was down 10% to $589,000 from the average price of $654,000 in the fourth quarter of 2008.

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 borough wide dropped 10% from the fourth quarter 2008 to the fourth quarter of 2009, neighborhood by neighborhood sale prices varied. They were up in Marine Park, Downtown Brooklyn/Boerum Hill, Greenpoint and Williamsburg, Heskel said. The number of homes sold fell in 12 of the 15 neighborhoods, with the biggest drops in Carroll Gardens, Downtown Brooklyn/Boerum Hill, Park Slope, and Greenpoint. Sales volume increased in Fort Greene, Bay Ridge and Clinton Hill. The increases in these three neighborhoods were due to the sharp rise in coop activity. Although overall sales volume declined by 20%, coop sales increased 9% from 256 sales in Q4 08 to 280 sales in Q4 09.

Volume has declined by nearly 26%, year over year. Condominium sales in particular were down a whopping 43% from 1,925 sales in 2008 to 1,088 in 2009. On the upside, the number of coop sales increased 13% from 835 sales in 2008 to 942 in 2009.

The total number of homes sold declined 47% from its peak in 2007; 5,460 sales in 2007 to 2,906 sales in 2009.

One year ago, Mr. Heskel noted one bright spot: the market favors buyers with good credit and adequate cash. Looking back, this evidently was the case this past year. 2009 was clearly a buyers market where borrowers with good credit and cash reserves were able to secure financing at good interest rates.

About HMS Associates

HMS Associates is a full-service Brooklyn-based residential and commercial appraisal firm. Founded by Sam Heskel in 1998, the firm serves all of New York City and its surrounding areas. Heskel, an associate member of The Appraisal Institute, is state certified in New York and New Jersey and is a member of The National Association of REALTORS®.

The team of appraisers at HMS Associates are FHA-approved, and Heskel is a member of Multiple Listing Services for Brooklyn and Long Island (includes Queens), Putnam and Westchester counties, and the Greater Hudson Valley.

For more details, market trends neighborhood by neighborhood, and to view the latest market reports, please visit our website at www.hmsassociates.net.

This week I discuss in a interview with Melissa Dehncke Mcgill from the Real Deal on the forclosure frenzy in New York. Please have a look.

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.

Somewhere in between the release of last week’s Manhattan market reports and the moment the first burger hit the grill on the Fourth of July, real estate appraisal firm HMS Associates snuck out a second-quarter recap of Brooklyn sales action. The numbers are similar to Manhattan’s, in that they are ruthless: double-digit price declines over last year (the Brooklyn average was $548,560), sales cut in half, etc. The Brooklyn Paper has a tidy summary of the report, pointing out that the biggest price declines came in the hybrid mega-hood of Dumbo, Boerum Hill and Downtown Brooklyn. Read the full article at Curbed .

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

New York - Homeowners across the country are challenging their property tax bills in droves as the value of their homes drop, threatening local governments with another big drain on their budgets.

The requests are coming in record numbers, from owners of $10 million estates and one-bedroom bungalows, from residents of the high-tax enclaves surrounding New York City, and from taxpayers in the Rust Belt and states like Arizona, Florida and California, where whole towns have been devastated by the housing bust. Click here to read the full article from the New York Times.

According to appraisal firm HMS Associates, residential sales volume in Brooklyn was down 65 percent in the first quarter, compared to the same period last year. Prices in the borough were off 8 percent compared to last year, but neighborhoods were affected differently. According to HMS, prices were up in Greenpoint, Carroll Gardens and Sunset Park, while Brooklyn Heights, Sheepshead Bay and Fort Greene saw prices drop. “For two years, sales volume has dropped, but prices have not,” said Sam Heskel, executive vice president of HMS. “Now … prices are falling into line with the reality of diminished sales volume.”

Read more at Brownstoner.

The newly revised Home Valuation Code of Conduct goes into effect on May 1st, but it remains to be seen whether the new provisions will resolve troubles that became apparent last year. The revisions require lenders to obtain appraisals through a third party, so-called Appraisal Management Companies, rather than order the appraisals directly through their own sourcing. The goal here is to create a firewall between the lenders making loans for properties and the appraisers, who are valuing the properties, thus eliminating any kind of pressure to influence the outcome of the appraisal.

I completely agree that there needs to be a way to prevent lenders from putting pressure on appraisers to produce favorable property valuations and am in favor of a firewall between the lending industry and appraisals. But the provision to require a third party to order appraisals is problematic.

Appraisal Management Companies (AMC’s) add another layer of fees to the process, which will either be passed on to buyers or will force appraisers to operate as such reduced margins that it will become too difficult to attract and retain appraisal professionals of high quality and experience. Appraisals these days are more complicated than they were  a couple years ago, when the market was constantly rising. A thorough, professional appraisal is a complex process, and it would be an unfortunate development if the appraisal industry was forced to raise fees in order to stay in the business.

Further, there are bound to be loopholes in the new provisions that still allow lenders to work directly with appraisers, defeating the purpose of the revisions to the code.

I’m curious to know what lenders and mortgage brokers think about the changes in the code, and how this will pan out for all professionals involved in the industry. Please feel free to share in the comments section below.

This week I’m featured in a Real Deal webcast on the sale of distressed properties. Please have a look:

Sam Heskel on Real Deal Webcast

… In this week’s Webcast, appraiser Sam Heskel of HMS Associates also tells The Real Deal’s Jill Gardiner that investors are beginning to look …

If your property value goes down, doesn’t that mean your tax bill should too? The answer is yes – but you need to file an appeal to find out. The deadline to file an appeal is March 2 in New York City and April 1 in New Jersey.

This year has been unique because property values have been in sharp decline. Your tax bill, as you know, is based on your property tax assessment, but tax assessments do not keep pace with changing markets, especially when the market changes as rapidly as it has in the past few months. Current assessments are most likely based on property valuations made a long time ago, when prices were higher. Chances are, you have not heard from your municipality about this. If so, check immediately to see how your home has been assessed and what your taxes will be for 2009. If your taxes seem out of line, you can file an appeal.

The appeal will require you to enter what you believe to be the true value of your home. While you can do research and make your best guess at this, the best way to determine this value is to have a professional appraisal conducted. The value you enter on your appeal will be used as the basis for your appeal, so it’s best to have a professional appraisal that will stand up to professional review by your municipality.

Please contact me if you are interested in learning more or would like to schedule an appraisal. For more information about the appraisal process in New York City and New Jersey, or for information on other municipalities you can visit our website. or contact us by phone at 1-866-467-5100.

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.

So we’ve all returned from the holiday season with no small degree of apprehension for what the coming twelve months might hold.  Anxiety prevails almost across the financial board.  Of course, we are awaiting the “change” that comes with a new US presidential administration.  Just days ago, Barak Obama gave his first major address on the economy with broad pledges about the things we as a nation will need to do to address the current crisis.

It’s interesting to note that the media at least in the form of this New York Times article is saying that in order to make these broad fiscal recovery plans possible, he’s going to need to delay at least some of the pledges that he made during the campaign.  Perhaps this is the nature of politics, but it still demands to be pointed out and I welcome your feedback as to whether this is legitimate criticism or whether we should just be saying desperate times call for desperate measures.

As for our local situation, all discussion indicates that the coming months and perhaps even years will lead to continued volitility for the New York Real Estate markets.  I came across this posting from a fast growing financial site called Seeking Alpha that describes the coming sittuation here in NYC as “shock and awe.”  Of particular interest was this piece from Crains New York called “Stress in the City” that claims we’re all gripped by fear and we’re about to embark on the worst period of buying (or lack there of…) and selling in decades.  It’s a pretty long and comprehensive piece but it lays out the sittuation in a clear way with some powerful numbers so I would recomend anyone looking for a strong handle of the sittuation please check it out.

Speaking about numbers, a sobering report released by Goldman Sachs came out in the Wall Street Journal in recent days indicating that condos would be shedding up to 44 percent of their value in the period ahead.  Ouch!  Here’s the concluding section of the report that leaves not too much room for optimism for right now:

So is there any hope for the New York apartment market? Apart from a dramatic turnaround in the city’s economic fortunes, the most plausible story is a drop in jumbo mortgage rates. So far, jumbo rates have not benefited much from the recent decline in mortgage rates, but this could change if the Fed (presumably in conjunction with the Treasury) decided in the course of 2009 to broaden its support from the conforming market to the private-label mortgage market. To make an extreme assumption, if the jumbo mortgage rate fell from the current 7% to 5%, this would reduce the “required” price decline from 35% to 19%. Of course, this assumes that affordability is the only measure that matters for home prices and there is no role for the “raw” price/rent or price/income ratio, and that Manhattan incomes stay at 3 times the national average.

In addition, it could be that societal and demographic changes will keep New York apartment valuations above the levels that prevailed in earlier periods. For example, one might argue that the memory of high crime rates was still fresh enough in 1995-1999 to make this period an excessively pessimistic benchmark. If crime stays low during the current economic downturn, perhaps Manhattan real estate will retain its higher valuation in coming years. Alternatively, one might argue that the aging of the baby boomers will continue to support the New York market as “empty nesters” want to live closer to the city’s attractions. These types of arguments are difficult to quantify and are often heard just prior to the start of a real estate downturn, but they do underscore that our analysis of the observable data on prices, rents, incomes, and interest rates only provides a very partial view of the New York apartment market.

With 2008 gone by now, all we can only say Good Riddance!  Beginning with the stock market having its worst year since the 1930’s.  What started as we know it with a sub prime crisis, quickly deteriorated to a total mess in the mortgage industry. Not to mention the high gas prices reaching almost $4.00 a gallon and Crude oil reaching nearly $140.00. With the major banks like Lehman Brothers and Bear Sterns going out of business or being bailed out. People losing their life savings or their pension plans which were wiped out together with these big icons. Then we saw the the real estate values plummeting across the country by 12% up to 30% in some cities. In a society where people looked at their home as an ATM machine the results were devastating. Soon eateries and retailers started feeling the pinch. With retailers and eateries going out of business along with banks shutting down, that put back on the market thousands of square feet of office and retail space.  The Real Estate market in Manhattan which has thus far defied the national trend of declining markets suddenly didn’t look so invincible. Next came the auto crisis with Ford, GM and Chrysler begging Uncle Sam for a bailout. If in the beginning of the year people weren’t sure if we are in a slow down economy or that the markets are just correcting themselves….. At the time the ball dropped in Times Square on New Years Eve, everyone admitted the unfortunate truth that we are in the midst of a Recession, with some making the argument that we are in the midst of a depression or heading there.

Ok, enough with that, now I’m going to give you some good reasons to be optimistic. First of all the economy is a cycle with ups and downs. After each up market comes a down market and vice versa. The new administration is reportedly proposing a very aggressive stimulus plan over the next two years which could be as large as $775 billion and include infrastructure investments and up to $300 billion in tax cuts.  Currently interest rates are at a all time low. The Real Estate Market will hopefully bottom out by mid year which at that point property values will hopefully start going up. The government already approved loans for the auto industry which means that auto loans will be available for consumers. Most of the Mortgage junk has been flushed out already along with the government bailout plans. With all said we can expect the economy to grow and be more prosperous in the second half of 2009. Lets hope.

As reported yesterday the numbers are looking even worse then we could have expected.  Unless you’re a buyer who’se in good financial shape there are very few positives that are coming out of these recent news cycles. A drop of 13 percent in the average sale price for homes around the country is a deeply disturbing trend and we’re fairly convinced that the end of this misery is nowhere in site. We will report here our annual Brooklyn Market Report in mid January of the New year.

The commercial real estate market has become the latest industry to begin actively seeking out help from the federal government according to this report in the Washington Post.

Here’s something to consider. We are all hearing the bleak news about property values declining. Here’s a tip of on making the most of the situation. 

File for a tax assessment appeal. What does that mean? Let me explain: Tax assessments are calculated from property values that may have been recorded some time ago, when it is possible property values were considerably higher depending on the property and when it was assessed. The lag between the current market value and the value at the time of assessment could mean a higher tax burden than is warranted. A tax appeal can remedy the situation, and a professional appraisal could determine whether an appeal is warranted.

The deadline for filing an appeal with the Tax Commission in New York City is March 1st and requires the applicant to indicate how much he/she thinks the property is currently worth. Media reports indicate dramatic increases in the number of tax appeals being filed in municipalities across the country. check back to my site. I will be adding links for various counties in the metro NY area with information on how to appeal process works in their counties.

So I had initially said that I would shy away somewhat from the Madoff story and try to remain focused on the issues that affect those of us who don’t yet have 100 million dollars to invest.  Yet, each day I’m realizing that this is a crime which has the potential to negatively impact upon almost all of us in some way.  For some it will be direct and irreversible harm.  Take for example, those people who went to sleep on Wednesday evening in ignorant bliss thinking they were worth tens of millions of dollars and the biggest concern was which model yacht would most impress the neighbors.  Within a day, some of these people were literally destitute and were heading for pawn shops, their wife’s jewels in hand.

These are scenes that we would never have thought possible in 21st Century America.  That someone at such a high level could be free to carry out such a harmful level of deciept is shocking.

Even in what’s been an incredibly volatile and mostly distressing financial year, the last few days can only be described as whirlwind and completetly sensational.  The news about Bernard Madoff was without exageration one of the most astounding stories ever to come out of Wall Street.  The fact that he was a thief is not the surprising part.  We’ve seen thieves of all shapes and sizes before but what is shocking is who he was stealing from.  As is indicated in this Reuters report, there are likely to be staggering losses of hundreds of millions of dollars, if not more, to many different charities.  The point here is that when people read about the theft and deciept of Madoff, they shouldn’t be under the impression that he was a Robin Hood figure who was simply stealing from the rich.  Rather his crimes will extend way down the line to deprive soup kitchens, hospitals, research programs, schools and hundreds of other insitutions will be permanent.