Furman: Gloomy First Quarter for NYC Housing

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Yesterday NYU’s Furman Center released its report on the city’s housing market for the first three months of the year, and aside from the downward trend in foreclosures citywide, the numbers don’t paint a pretty picture. With respect to Brooklyn, the total number of sales in the first quarter, 1,695, represented a 21 percent year-over-year decline and a 19 percent dip from Q4 2010. Furman’s “index of housing price appreciation,” meanwhile, pegged Brooklyn as down 28 percent from the peak of the market, which the center defines as the fourth quarter of 2006. On a slightly more positive note, notices of foreclosure in Brooklyn were down 15 percent from the same time last year. Meanwhile, the report says that new residential building permits were basically nonexistent in Brooklyn—25 units in total, down 65 percent from the same period last year—and across the city as a whole, which only saw 158 new units green-lighted, a 45 percent drop from the same time last year.
New York Quarterly Housing Update 2011: 1st Quarter [PDF; NYU Furman Center]

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  • daveinbedstuy

    Why do they do this based on price per unit??? It looks like the numbers they have for Brooklyn are not at all representative of “brownstone Brooklyn.”

  • Bejamin Disraeli ‘there are three kinds of lies; lies, damned lies and statistics. Housing sales info very deceptive. Also first quarter #s rep last year’s deals.

    this year hot. Averages skewed by what is selling (one beds vs three beds) and total sales numbers affected by lack on product on market. Reno townhouses in shortage, unreno prices going back up, one beds in shortage in cobble hill, rents crazy

  • Question: The Furman Center is a long established research center at a major university. If their numbers are as full of s#it as several people say four times a year on this site, why hasn’t New York University been shamed into cleaning up its act? Or, if the data is as inaccurate as I read here, why doesn’t everyone in and near the industry just ignore the Furman Center until they go out of business?

  • G, the problem with R.E. stats is comparing apples with apples, not something Furman can do anything about.

    If you report sales of apples, which have a steady and predictable supply, and then go down, something is going on.
    But if sales of 7 room apartments in central manhattan decline, it usually means there is less product!

    Very hard thing to comp, real estate. Not their fault.
    Data not itself inaccurate, context, framing and understanding at issue.

  • sorry, but this is GOOD news :) get the fuck out of here with your multimillion dollar houses in the ghetto.

    *rob*

  • Provocative statements like ‘multimillion dollar houses in the ghetto’ are irrelavent and misleading, as there as yet are no sales over 2mm in any ‘ghetto’ in BK i am aware of.

    All anyone is saying if the resi market has turned decisively in Brooklyn. Really just a question of getting it and understanding what is going on now. Not good or bad in an of itself, just what is real. Good for sellers, bad for buyers of course. But denying reality won’t make it go away.

    Folks not in the market are like spectators at a game that never ends, they have no real idea of what is happening on the court between the players, they just watching the stats.

  • ^^^ +1 to the veteran.

  • quote:
    Folks not in the market are like spectators at a game that never ends, they have no real idea of what is happening on the court between the players, they just watching the stats.

    wtf does that even mean? im sorry but i like seeing rents be stable and i abhor hyper gentrification. and i dont like to see fugly ass rowhouses in the ghetto going for a million dollars. call me crazy if you must!

    *rob*

  • It means that it is hard to see the waves off shore from the parking lot of the beach…. in not in the water, can’t tell the temperature

    i like seeing rents stable too, support Rent Stabilization, did 1000 units of affordable housing, and often say that, while great for owners that houses in Bed-Stuy (most of which is surely not a ghetto) go for 900k but what do their kids do to stay in the neighborhood…. so we are not feeling different

    i am just describing the scene

  • For great analysis of RE market as it unfolds – and a deeper understanding of the perils of real estate statistics – check out http://www.urbandigs.com – he tracks the Manhattan market but I think that’s relevant for Bkln – he has created all these innovative ways to track real time stats and analyzes more traditional reports as they come out and explains how they should be interpreted.

  • Realestateveteran, thanks for the great commentary. But I don’t understand: Stats say sales prices and volume down — because it’s out of date? Why does it not reflect prices up?

  • Maly

    Why is it so hard to understand that even though the market as a whole is down from the peak, brownstone Brooklyn is still frothy? There are some solid sales prices in prime neighborhoods, sometimes even surpassing the spring 2008 peak, but that not what the Furman center is tracking. They are looking at all the sales, not just what would be featured in this blog.
    Every time their report comes out, the usual suspects squeal and scream about how “stupid” it is. It’s not wrong or stupid, it’s just not measuring the pocket of hotness you care about (fancy brownstones and new condos.)
    It’s the same story in Manhattan: prices and averages keep sliding down, and all the numbers are down from the peak, but there are super-fancy houses and condos establishing new heights.

  • Mopar, Maly: if you do averages, and small units sell, average prices go down; if there is no inventory, units sales go down.

    And it isn’t just brownstone brooklyn go into Kensington/Ocean Parkway market go to Red Hook
    things have changed

    not all prices up, but velocity and activity is up
    that is key

    though QNS is not rocking, all of brooklyn seeing increased activity this year. closings in february are deals from LAST year. Manhattan studios and ones plentiful, but prices NOT going down.

    The market has turned.

    Best way to context: to those whom to market is moving, they are 3 mos ahead; to those whom market is moving against, they are three months behind. I.E., if unit worth 500k, seller thinks 550 and buyer things 450.

    market moving to sellers, believe it or not

  • Speaking of sales, is it right that if owner occupancy in a condo drops below a certain percentage, Fannie Mae will not get involved in a loan, meaning you can’t sell the condo because a buyer couldn’t get a loan? I’m trying to buy now, but heard that, and am mortified by such a prospect, obviously. No one seems to know the real percentage. Help!

  • Maly

    bk, I try to leave the future to BHO, and keep to the immediate past. I really wish Urbandigs covered Brooklyn, because his stuff is the best.
    There is a lag of 3-4 months between a deal and a close, so I agree with you, first quarter is a bit of a misnomer if you think it’s covering current deals. It reflects accurately the market between September-December 2010, which took a bit of a pause after the hot spring/summer season & reflation. I think this spring was also pretty hot from anecdotal evidence; I’ll wait for the second quarter report to find out exactly what happened. I’d guess the prices are up, the volume is down against last year. I also think the classic trend of differentiation in downmarkets is continuing, so that averages hide a tale of three cities: reflation for prime properties in renovated condition, decline for less than prime stuff, sharp decline for problem properties.

  • not what i am told prices for unrenovated townhouses coming up after being flat

    this is not longer a downmarket, what i am trying to say
    market has turned in commercial in manhattan, dumbo almost sold out of office space, retail rocking…..

    market has turned this is not a downmarket anymore

  • Maly

    That can only be established in hindsight, because of the seasonality of the business. It may be the bottom is behind us; I personally doubt it. I think we are going to continue crawling at the bottom for a while, up and down with the seasons, until the economy is on a more solid footing.

  • > i like seeing rents be stable and i abhor hyper gentrification

    Then you seriously chose the wrong city and neighborhood to call home.

    Consider moving to the Midwest if change perturbs you so much.

  • I hate over population – ghetto or no ghetto.

    Clinton Hill, FG and Bed-Suy should be re-named “The Sardines. When is it gonna stop. WTF!

  • Dear Who,

    We aren’t even back up to 1930 population levels.

    1930 - 2,560,401
    1940 - 2,698,285
    1950 - 2,738,175
    1960 - 2,627,319
    1970 - 2,602,012
    1980 - 2,230,936
    1990 - 2,300,664
    2000 - 2,465,326
    2010 - 2,504,700

  • I don’t know, veteran. Not what I am seeing in my own private Idaho. Across the street from PP, in “prime” Park Slope, the one bedrooms for sale in my elevator building are languishing. Fully renovated places, nice finishes, at least 800 sf (real sf) that used to sell in a weekend are languishing on the market for months. Corcoran, the mother of all inflators, now pricing units that routinely used to sell for 565K at 475K.

    So is Corcoran now thinking like the buyer three months behind just to move units?

  • @dylanfan – Sorry, but 1BR’s in full-service buildings on/around Prospect Park are hardly hot-ticket properties these days…
    Just take a gander at the rising ask prices for 2 or 3 BR units all over the neighborhood: most folks looking at the Slope are searching for family space [or at-least for more space than Manhattan]. 1 BR’s don’t appeal to that market – especially in areas closer to the park which trend towards to the olds [Neighbors for Better Bike Lanes, anyone??] rather than the yoots on/below 5th Ave & the South Slope.

  • Maybe so, parked slope, but I’ve been in this building for eight years and until this fall, one bedroom units never stayed on the market longer than it took to hold the first open house. They have a nice entry foyer, a separate dining room with window (though they don’t “covert” easily) and large rooms. Plus the location. They were snapped up by 30s couples or single women, for the most part.

    My thought is that perhaps all the new condo developments in the north slope are flooding the one bedroom market some. Still the price erosions surprise me when there are indications that the market seems to be swinging upward again. Last spring, one of the units in this line sold for 545K. This spring, another having trouble finding a market at 475K? Both reno’d to the hilt.

  • Agree with parksloped re: rising prices for 2 and 3 BRs in Park Slope– people I know currently looking for a family-sized apt there keep encountering bidding war situations and/or above-2008 asking (and often closing) prices. Inventory is low and it’s a little nuts right now.

  • dittoburg

    Can we please ban posts starting with “Sorry,..” or “Uh,…”

  • It does make sense considering the title of the blog and all, but seems to me most of you don’t realize the size of the gentriverse vs. the rest of Brooklyn. To me the data looks right, especially when using median rather than average prices this totally makes sense – the sheer number of homes in middle class and poorer areas dominate.