Brooklyn home prices continue to mmmDROP

BROOKLYN HOME PRICES FALL IN THIRD QUARTER

“Buyer’s Market” Prevails As Prices Drop 2 Percent Borough-wide

New York, N.Y., November 12, 2008 – The average Brooklyn home price dropped 2 percent to $695,285 in the third quarter of 2008 from $708,457 in 2007, according to a quarterly report produced by Brooklyn-based real estate appraisal and consulting firm HMS Associates.

“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,” said Sam Heskel, executive vice president of HMS Associates. The average home price figures came from HMS’s comprehensive quarterly study of 15 representatives neighborhoods in Brooklyn. “Not to 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, according to the study.

The two percent price drop in Brooklyn in the third quarter compares with an eight percent rise in the second quarter ’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, Heskel said. The number of homes sold rose in Carroll Gardens, Williamsburg, and Marine Park but dropped substantially in Greenpoint, Fort Greene, and Brooklyn Heights.

The report contains data on single- and multi-family homes as well as condos and co-ops. The report includes neighborhoods that show both increases and decreases, and deemed together a fair reflection of what is happening in Brooklyn as a whole, according to Heskel.

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, said Heskel. 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, the report also showed. Some of the numbers do not correspond to reports HMS has previously issued because the data is adjusted to reflect newly recorded sales.

“What’s happening in Brooklyn reflects the Manhattan market,” Heskel said. “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.”