Brooklyn Home Prices Fall

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.