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July 3, 2007
BHS Report: Brooklyn Up Less Than Manhattan
The second quarter market report from Brown Harris Stevens was released yesterday. It's pretty thin on the Brooklyn data, which only the neighborhoods of Brooklyn Heights and Park Slope covered. Compared to the skyrocketing prices in Manhattan, the Brooklyn numbers are relatively blah. Townhouse prices in Brooklyn's two fanciest nabes edged up just one percent, according to the report, to $578 a foot; meanwhile, studios were up 4 percent, one-bedrooms rose 2% and two-bedrooms dipped 4 percent. The $578 number sounds very low to us and has be getting dragged down by the South Slope since all the good stuff in prime Park Slope and Brooklyn Heights is more in the range of $700 to $900 a foot. More interesting than the year-over-year number, however is how Q2 compared to more recent quarters. According to the BHS report, average per square foot for townhouses in these two areas spiked to over $700 in 3Q 2006 before falling to $634 in the fourth quarter and $568 in the first quarter of this year. The second quarter number was almost two percent higher than the first quarter. But what about all the neighborhoods that are left out of the report? We suspect that there was something of a bifurcation of the market in which neighborhoods that were perceived to have made it safely over the gentrification hump saw prices bid up faster than those with greater perceived risk. Overall, we would expect to see more bullish results for the borough as a whole than the Slope and Heights numbers, which makes sense if you think of these two areas as the safe, low-beta blue-chip stocks.
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Comments
What a joke.
With the "bullish" areas of brooklyn missing from this report, the info is completely irrelevant.
Park Slope and BH are not only NOT bullish, they are losing their value precisely because there are neighborhoods nearby that ARE attracting new buyers.
Ignoring those areas doesn't make them go away. It just makes Brown Harris Stevens' reputation go away.
Posted by: Anonymous at July 3, 2007 9:37 AM
"But what about all the neighborhoods that are left out of the report? We suspect that there was something of a bifurcation of the market in which the neighborhood in which we happen to own a house probably took off like it had a rocket strapped to its ass. At least you don't have data to prove otherwise, so that's the story we're sticking with for now."
Posted by: Anonymous at July 3, 2007 9:49 AM
That's pretty good, 9:49. LOL.
Posted by: Brownstoner at July 3, 2007 9:59 AM
Or maybe Brooklyn is down?
Corcoran said an article in the NY Times today:
"Brooklyn did not share Manhattan’s price rise. There were more deals, but the average apartment price dropped by 4 percent, to $629,000, compared with last year, according to data from the Corcoran Group."
Now, Corcoran has the same interest as Brown Harris, in spinning the data in the best light possible, right? Yet even they aren't trying to say Brooklyn is up over last year.
Posted by: Anonymous at July 3, 2007 10:03 AM
Bstoner,
9:49 here -- seriously, I think you're may be right, as Bed Stuy, etc., seem anecdotally to have seen fast price bumps. But my two questions:
* Wouldn't most of Manhattan (south of 96th say) also be "blue-chip" under this scenario? That didn't hold it back so other factors may be at work.
* Isn't there another agency that releases data about more neighborhoods? Is it Corcoran?
Posted by: Anonymous at July 3, 2007 10:03 AM
The most interesting change is actually how much the prices are down from the 3rd quarter of last year.
Posted by: Brownstoner at July 3, 2007 10:14 AM
what about fort greene or downtown brooklyn?
is there a chance we can get such market info for these areas as well?
Posted by: monito at July 3, 2007 10:19 AM
Houses and condos are not stocks. No 2 houses are the same. They are all different products. And to keep making analogies to stock market or using stock lingo (blue-chip, beta)only confuses the issue.
Also, the more you break down housing data (by neighborhood, time period, classification,( 1, 2 3 bdroom) the more easily skewed the stats can become..because numbers/units sold become so small any comparison becomes meaningless.
To really think that 1 neighborhood is up 1 quarter and down next and next neighborhood is down 1 and up the next is nuts.
Best to look at inventory of unsold, length of time on market, and total number of sales.
Posted by: Anonymous at July 3, 2007 10:40 AM
Off topic, but I just posted in the forum an inquiry about Kingsview Coops. I'm looking to buy, and would love to hear about the area, the coops, if you are familiar with it. My email is nonpareil AT gmail.com. Thanks!
Posted by: laura at July 3, 2007 10:57 AM
The truth is, Brooklyn property prices are directly influenced by Manhattan. If Manhattan goes up, BK must follow.
Posted by: LAX at July 3, 2007 12:53 PM
Would it not make more sense to have a report with the numbers coming from all segments of the real estate community? A pipe dream perhaps, but Corcoran and the other blue chip firms do not have accurate statistics in neighborhoods like mine, where more sales are made by smaller, "no name" local brokers, and perhaps even national firms like Foxtons or Century 21, over those by the large firms, most of whom seem to only take the more expensive listings. We may not have a total volume of sales to equal more expensive communities, but surely all of the other sales here and in other Bklyn communities east of Flatbush would skew up the numbers somewhat. And what about the rest of Brooklyn? Brownstone areas are only a part of Brooklyn real estate. I don't get how these numbers, as reported, would mean much of anything.
Posted by: Brower Park at July 3, 2007 1:53 PM
Brower Park - I agree with you. We get very media slanted real estate info here in NY. That insist on giving stats for very limited areas (Manhattan - most of the time south of 96th St, some Brownstone Brooklyn 'hoods, etc) to make more interesting reading and feed the public facination with the life and prices wealthy people pay.
Rarely in NYTimes, local blogs, RE Broker releases do you read about average price for NEW YORK CITY or metro area.
I love the way the compare Manhattan prices to other metro areas. But do they ever take the eletie top 10% of SFrancisco neighborhoods and compare to NYC? I guess have to face it. Besides restaurant snobs here, we're also real estate snobs and prefer to forget about majority of NY.
Posted by: Anonymous at July 3, 2007 2:11 PM
I find it hard to believe the BK is down. I've been out pounding the street looking for something affordable (sub 700k?) w/ outdoor space and a few other things and it's been tough slogging. And I'm willing to go to some of the more transitional nabes. Whenver there's anything good, a freaking bidding war breaks out. So, anecdontally at lease, I don't know if I'm buying that brooklyn is down. It seems that most prime or offprime areas are headed higher rather quickly. (ditmas park especially)
Posted by: Dan at July 3, 2007 2:19 PM
2:19
Talk about a freudian slip "at lease"
Posted by: Brooklynnative at July 3, 2007 2:42 PM
I've been on the hunt as well throughout Brooklyn and it looks like Crown Heights, Bed-Stuy/Bushwick, and Lefferts Manor (on the outskirts of the historic district) are hovering in the 700's range. Sellers in these areas are asking top dollar and many homes need serious improvements. I've been hard pressed to even find a new paint job for this price range. Sellers clearly feel confident enough to offer homes without much improvement as buyers move further into Brooklyn after facing bidding wars closer to the bridge. Ditmas Park has become almost impossible to find a single family in decent condition under $1 million. I've heard from many potential buyers that what some R.E. firms use to refer to as "other Brooklyn" has become outrageous in terms of pricing. You can't even afford to buy a house on the block you got robbed on when you were growing up. It's bitter sweet.
Posted by: HistoricBrooklyn.com at July 3, 2007 3:00 PM
"You can't even afford to buy a house on the block you got robbed on when you were growing up. It's bitter sweet."
And there were lots of those kinds of blocks in "Brownstone Brooklyn" a few years ago... :)
Posted by: bren at July 3, 2007 3:41 PM
come to think of it, folks are still getting robbed on those very same blocks... just with a smile and a handshake this time!
Posted by: bren at July 3, 2007 3:43 PM
The agency reports don't have enough data for Brooklyn to be of ANY use really. That's true for BHS, Corcoran, Halstead and Elliman. They just don't do the kind of volume to allow an apple to apple comparison quarter to quarter or year over year. The REBNY numbers at least compile all the data from the REBNy firms, but not the many small independent firms that don't share much of anything, including data. Then the other option is using public data. There is one appraisal firm that brownstoner found that had some more interesting, more relevant numbers in the past for Brooklyn. Brownstoner, can you please dig out that link and maybe you could call them and see when their new numbers will come out? I suggest you just ignore this data from the individual agencies in the meantime for Bklyn. Otherwise you can ask an agent to do market research based on sales that corresponds to the kind of property you are most interested in. This is useful if you are considering buying or selling. The other thing about all of this blind data is that it doesn't take condition or other factors beyond size and area in to account. So a place that is a stone's throw away from a gas station on 4th Avenue will get the same merit as a place on a gorgeous park block zoned for an in-demand elementary school, you get the idea.
Posted by: Anonymous at July 3, 2007 5:16 PM
Bren, That was funny!
Posted by: HistoricBrooklyn.com at July 3, 2007 6:00 PM
It's bad news for Brooklyn if the price gap between Brooklyn and Manhattan prices is widening, rather than closing, as it has been for a long time. Very sad indeed.
One has to wonder if this blog has helped or hurt Brooklyn's overall rep city-wide, with all its attempts to drive down prices in Brooklyn.
Posted by: Ed at July 3, 2007 7:31 PM
I agree with all of the above posters who think that this report doesn't say much. I was fortunate to have purchased in Ditmas Park before the prices skyrocketed and lucky for me I never even got mugged once! I have friends who are teachers, editors and otherwise gainfully employed in various professional careers who can't even afford to buy a coop or condo here now. Please tell them where Brooklyn prices "are blah" so they can put in their offers.
Posted by: Anonymous at July 3, 2007 8:40 PM
The NYC reals estate market has a "relentlessly cyclical nature."
Think Coney Island "Cyclone"! :)
Welcome to Brooklyn!
Posted by: bren at July 4, 2007 11:21 AM
The bubble is collapsing from the outside in. Learn to deal with it.
Posted by: uh oh at July 5, 2007 4:59 PM
This kind of scenario is awful... could it be about to happen here in Brooklyn by 2008-09?
What do you think?
"The hardest hit ZIP in California was Sacramento, 95823, where there were 634 default notices, repossessions and auction notices. It had the sixth most foreclosure filings for any zip code in the nation.
California boasts a vibrant economy and a fast growing population. According to Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), foreclosures, overwhelmingly, used to come courtesy of serious underlying economic problems such as job layoffs or plant closings.
But the California foreclosure spike, as well as those in Florida, Arizona and Nevada, was set up by runaway appreciation that boosted home prices beyond affordability.
Double-digit price increases had attracted hordes of investors, who added to swiftly rising values. Developers bid up land prices in a scramble to get product to market. When markets cooled, speculators added to downward price pressure by unloading their properties onto already lengthening inventories.
"In many of these markets," said Duncan, "prices fell below what investors paid. Many have simply walked into their banks' offices and handed in their keys."
Posted by: bren at July 5, 2007 6:27 PM
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