REBNY Condo Market Report: No Need to Panic (Yet)

As many predicted, condo prices in brooklyn will flatline and maybe dip a little bit before picking up steam again next year.

Panick mongers and bitter renters aside, there will be no bargains out there, just more realistic growth.

Posted by: guest at May 28, 2008 9:42 AM

96% YOY increase in Park Slope. Real estate is tanking LOL! The New York market is astounding.

Posted by: guest at May 28, 2008 9:50 AM

9:50, are you really dumb enough to think that statistic means existing buildings sold for 96% more than a year before?

Posted by: guest at May 28, 2008 9:56 AM

Market might take a breather but it is not going to fall very far. Looks good.

Posted by: guest at May 28, 2008 10:09 AM

Not, IF, Johnny...WHEN. Stop with the daydreams and get back to work.

Posted by: guest at May 28, 2008 10:13 AM

There weren't many "condos" in the south slope before a year or two ago, and high end buildings in the slope -- such as the Gehry building on the park really skew the averages. Need to look at year-over-year on the same builidings, and this just doesn't give any indication of that.

Posted by: guest at May 28, 2008 10:13 AM

9:56 if you cannot admit that the South Slope number is not a startlingly positive stat, I feel sorry for you.

Posted by: guest at May 28, 2008 10:14 AM

Johnny - the question is irrelevent. Noone really belives that Ratner will build all those units over 5 year. Even optimists at this point believe that it will be a 10 year build out - probably even longer. That means that he'll be building, on average, 500 units a year - which is a drop in the bucket for a borough with 3 million people in it.

Posted by: guest at May 28, 2008 10:18 AM

Industry says industry is doing fine, and will get better.

Posted by: guest at May 28, 2008 10:21 AM

So after a year on the market, how many are sold at BelTel, Oro, 1 Hanson, Forte, etc? Then look at all the smaller buildings that are off the radar. I was going to look at a unit in a building where nothing had yet sold (we already have a very large co-op and are interestd in downsizing) but I do not want to be one of a handful (at best) of owners in a condo paying for the entire building operations as units sit empty or the sponsor rents them. Just wait another year when Toren , Oro 2, etc are all sitting empty too. It will be like Miami -- only smaller in scale.

Posted by: guest at May 28, 2008 10:38 AM

Toren is going to be a hot property. I know a bunch of Manhattan (a few architects) folks who are interested. They said it's the one project they've seen so far in Brooklyn that looks really attractive. And these are NOT the usual move to Brooklyn types...

That said, Park Slope is really on fire. Wow. 43 sales in April 2008 and 15 in April 2007.

That's astounding, actually.

Posted by: guest at May 28, 2008 10:41 AM

Sponsor is responsible (as he/she is the owner) for CC on all unsold units.

Posted by: guest at May 28, 2008 10:44 AM

Frankly the only bitter people I ever see posting here are homeowners. Must be tough to know you can't afford your mortgage without renting to us.

Posted by: guest at May 28, 2008 10:46 AM

One thing I don't see people discussing is the number of Europeans who have bought in Park Slope.

Seriously, every time I'm in the playground, at least 1/4th of the people there are speaking French, German, Italian, or English with an Irish accent. This is as opposed to say 2 years ago when this was a rare thing.

I have to think it's a factor in the Park Slope area.

Posted by: guest at May 28, 2008 10:48 AM

10:44 Technically yes -- but they can not pay, pay late, cut services etc. Until the building is owner occupied you are at tehmercy of the sponsor (been there, done that 25 years ago).

Posted by: guest at May 28, 2008 10:49 AM

i'm impressed with the stats. what about coops? $ or % increase..does anyone know if they included them in those #'s?

Posted by: guest at May 28, 2008 10:50 AM

10:38 you are not that bright you listed 4 buildings in Downtown Brooklyn that there is a demand for, MIAMI has a million different buildings in an area that people buy second homes you cant compare the two...

One is a vacation spot and the other(NYC) people need to live in...

Posted by: guest at May 28, 2008 10:51 AM

How many condos does Park Slope have on the secondary market? Isn't the higher number of sales entirely a function of more new construction for sale on Fourth Avenue?

Posted by: guest at May 28, 2008 10:52 AM

10:48, I've witnessed this also. A few of my neighbors are new transplants from Europe. And contrary to what some say, my experience is not that these people have bought second homes, but have actually moved to Park Slope, it would seem.

I saw Renee Zellweger on 7th Avenue this past weekend. Never heard anything remotely about her living in Park Slope. Maybe just visiting...?

Posted by: guest at May 28, 2008 10:52 AM

Europeans are buying all over the City because for them it's a bargain. I think international neighborhoods are wonderful- in Manhattan my impression is they buy for investment or business purposes. But maybe in Park Slope- and I'm assuming other parts of Brooklyn- the neighborhood appeals to them as a great place to live and raise families.

bxgrl

Posted by: guest at May 28, 2008 10:55 AM

As a Brit relocating to NY and looking at living in Park Slope, don't count on us to prop up prices. I am unlikely to buy in this market -- it's too risky.

Posted by: guest at May 28, 2008 10:57 AM

Miami has approximately 600,000 residents and last I heard had around 30,000 properties on the market.

NYC has 8.25 million people and a similar number of properties on the market.

Posted by: guest at May 28, 2008 11:00 AM

10:57- but wouldn't buying be better for you in the long run. Whether or not it props up the market- wouldn't it make the most sense financially?
bxgrl

Posted by: guest at May 28, 2008 11:01 AM

"Isn't the higher number of sales entirely a function of more new construction for sale on Fourth Avenue?"

Well, if the market was so dead, then no one would be buying said new construction condos on 4th Avenue.

Seems that is not the case.

At all.

Posted by: guest at May 28, 2008 11:01 AM

10:57 = not a brit.

Posted by: guest at May 28, 2008 11:02 AM

11am great point 10:38 is searching...

10:38am = bitter renter

Posted by: guest at May 28, 2008 11:03 AM

Well... I see that sales at 1 Hanson Pl. is very strong (No BS). But, there are some signs of weakness in our market. The Forte, Oro and other are going very badly. The new mortgage guidelines are making condo buying a nightmare. Why you ask? Because you fill out a Verification Of Rent or a VOR. The Underwriter looks for "Payment Shock" and ability to pay your bills. If you was paying 2500.00 a month for a 2 Bedroom in Park Slope (No PS BS Please). Then you are buying a Condo that with Mortgage payment and Maintenance will come you to 5100.00 a month with no increase in income the Underwriter will tell you to "Pound Sand", Loan denied! The closings that are going on was from last year and the early part of this year and I would like to see the numbers for the rest of this year. I think the Condo market is going to get killed! The Developers are STILL building like mad and there are tons of units coming online very soon. Last but not lease Interest rates are going back up this year, believe me on this one. I think the free and easy money is dead. RIP Mutant Real Estate Bubble.

The What

Someday this war is going to end...

Posted by: guest at May 28, 2008 11:10 AM

Market 101: No new land. Prices may be higher than construction costs or rental values, but there is no conversion of rentals to sales, no new construction, no renovation, no expansion of the acceptable places for people with money to live. At least if you ignore the Watchtower conversions, Flatbush Ave, Fourth Ave, Gowanus, the South Slope, BedStuy, DUMBO, the continued demise of rent control, renovations and upgrades.

Posted by: guest at May 28, 2008 11:11 AM

REBNY is counting only CONDO sales -- thus it almost completely reflects the state of new construction. New construction will do fine until it doesn't.

Posted by: guest at May 28, 2008 11:11 AM

10:57 - buying is definitely better for you, regardless of price. The risk is only in staying out of the market. The market always goes up, and rent is gone forever while interest/taxes/repairs ... um ...

Anyway, buy now, so we can get out!

Posted by: guest at May 28, 2008 11:16 AM

"The Forte, Oro"

If sales here are sluggish, it's because it's a bad product. Both are fine. Not anything to write home about. One Hanson, One Brooklyn Bridge, On Propsect Park are higher quality and doing much better.

Good product sells. Crappy ones do not.

Posted by: guest at May 28, 2008 11:18 AM

"The Developers are STILL building like mad and there are tons of units coming online very soon."

One problem with this statment, the What.

It's totally false.

New builds are down 64% this year over last. New ground is not being broken on much of anything right now. When the current and soon to be on line inventory is sold in the next year, we are in for a SERIOUS inventory shortage in NYC. You know where prices will go then?

Yup.

Posted by: guest at May 28, 2008 11:25 AM

And if prices go up, nothing will be built to meet the demand.

Posted by: guest at May 28, 2008 11:28 AM

The data is skewed by shifts in the composition of the inventory, with large new buildings coming on the market and dominating sales.

I suspect the cost for an older unit in a small building is slipping.

Still, the market is being affected by two contrary (for Brooklyn) trends -- the deflation of a national cyclical housing bubble of epic proportions, and a structural shift in the relative desirability of urban and suburban locations in favor of the former. The structural shift may be holding off the cyclical downturn for now, but prices will still have to come down.

Posted by: guest at May 28, 2008 11:40 AM

You are correct, Biff.

And if I recall correctly, didn't it used to be gunna, back in the day?

Posted by: guest at May 28, 2008 11:44 AM

""The Developers are STILL building like mad and there are tons of units coming online very soon."

One problem with this statment, the What.

It's totally false.

New builds are down 64% this year over last. New ground is not being broken on much of anything right now. When the current and soon to be on line inventory is sold in the next year, we are in for a SERIOUS inventory shortage in NYC. You know where prices will go then?

Yup."

Nope Homeboy, I live on planet Brooklyn and I see the developers are STILL building like Mad! Yes I will agree that permits are down because there are not loaning any new money! The well is dried up and the construction you see is from last year! The developers are trying to get these units up and sold!

Well slopefarm I don't have to "go off" anymore. I think some people are coming around to the fact that our economy is very weak and is headed for tough times.

The What

Someday this war is gonna end...

Posted by: guest at May 28, 2008 11:49 AM

To Biff and others I have a log in now. I just using another computer and I don't have to time to configure the settings.

Plus one I would like to add Thanks to Brownstoner for 2 things. Posting the NY Mag article was very brave. I would've buried it! Next, Thanks for unblocking my IP address, It make life much easier.

This is The What homeboys, Stop hating!

The What

Someday this war is gonna end...

Posted by: guest at May 28, 2008 11:55 AM

11:45am makes the most cogent point in this debate that I have read to date. The past few years have seen a remarkable increase in the desirability of urban markets, for numerous demographic, cultural, and economic reasons. This, combined with the scarcity of buildable land, has contributed to supporting certain urban markets, including NYC. So far, so good. These trends have recently run into the headwinds of a slowing national economy, a finance industry downturn, and a downturn in credit markets which in particular threatens to reduce the availability of financing and increase the cost of borrowing even for well-qualified buyers.

Which of these counter trends will win out? In the short-run some weakness in NYC markets seems inevitable, given the influence of the Wall St economy. However, long-term, I'm very confident that NYC markets will continue to thrive, albeit at a slower pace of appreciation than we have seen.

- BB

Posted by: guest at May 28, 2008 12:02 PM

Sorry, meant 11:40am...

- BB

Posted by: guest at May 28, 2008 12:04 PM

""configure the settings???"" all you have to do is login"

Ok this the last time I explain this. I have 2 Macs and no they are up to date. I have to configure my "Keys" to put in the login on my main computer (I'm posting from now). I will get to it but, people should know me by now (Harold Melvin comes to mind now).. So stop hating!

I took a VERY unpopular position and stuck with it. Thru all the insults I never once wavered off course. Now the reality is catching up everyone. People who thought I was nut (some still do) are saying " You might be right".

May was a brutal month! Soaring Gas prices killed any notion of a recovery in any asset class and I think we have a long way to go.

The What

Someday this war is gonna end...

Posted by: guest at May 28, 2008 12:06 PM

Following up on 11:40 and 12:02 -

I think gas prices skyrocketing (at a faster rate than home prices ever did) is also going to impact that. I have a handful of friends who are currently seeking work in NYC because they "don't want to own a car anymore"

I think it trend will continue.

Did anyone READ the article in the Times which references Seattle. Yes, it said inventory there was rising and they were starting to feel the effects of the market, but it also said that the downtown area and close in urban areas were still doing well and holding up.

This leads me to believe that people are willing to pay a premium to live in the urban core. Even in this declining National Market.

Posted by: guest at May 28, 2008 12:09 PM

10.41 -

I have to agree about Toren. It looks like it's going to be a fantastic proprety, and at less then $750 / sqft, it still looks pretty well priced.

- Architecturally, it blows anything on Myrtle / Flatbush out of the water - no one can say that it doesn't look distinctive.
- From an amenities perspective, they seem to be much better designed - although everyone has a pool, putting in a sky light and placing the pool on an elevated floor with windows was a brilliant idea.
- The kitchen appliances are much better quality than the GE Profile crap they put into most developments (although the washer/dryer sucks).
- Don't know what the LEED certification will do, but can't see why it would be bad
- 25 year tax abatement - even if you hold it for 10 years, you can still flip it at a premium

Now, if only they would knock down those bloody projects nearby.

If only I had the spare cash on hand to put down a deposit....

Posted by: guest at May 28, 2008 12:30 PM

12:24...

The old What's sign in was "the what"

not just "what"

You are also a fake.

Posted by: guest at May 28, 2008 12:36 PM

Its a shame, the what is dead. Now just a bunch of posers and losers trying to latch onto someone else's notariety. I didnt much care for the what, but now I admit I am sad that no post signed by "The What" will ever be legitimate enough to avoid scrutiny.

Posted by: guest at May 28, 2008 12:41 PM

ran into a couple that are both brokers in williamsburg over the weekend (we have kids the same age that play in McCarren park together). asked them about business expecting to hear not so good news and they said that it's great. no slow down at all in williamsburg.

other anecdotal evidence - my neighbor just went into contract on a $1.25 million apt in williamsburg and a condo a couple of blocks away was a re-sale for I think like $1.5 million.

my personal analysis is that we are going to continue to see a big slow down in building which is going to collide with pent up demand in maybe 2? years creating a sellers market (for condos).

12:30 - GE crap?? really. that's a silly comment. great brand. i've had fancier in my old, and got GE last year, and it's terrific. i do cook a lot although no chef. really, this whole over the top appliances thing is beyond ridiculous. my mom was a remarkable cook using a very basic stove/oven. (and no microwave!). the idea that all new yorkers need some expensive oven that has even more expensive repairs is just so stupid!

Posted by: guest at May 28, 2008 12:45 PM

12.45 -

I looked at offering document (a friend is buying there), and they're putting in a 4.5 grand Liebherr frdige, and a 3 grand Electrolux oven/range. GE Profile may be fine, but I don't think it's on par (used GE Profile last few years, since all the rental I've stayed at use them).

Posted by: guest at May 28, 2008 12:50 PM

12:50 - sure, there's better, of course, but to say that brand new GE appliances with a convection microwave are somehow subpar, is nutso. and honestly, i would rather not pay for appliances that add to the bottom line that i don't need and don't care about.

i think that size, central air conditioning, and outdoor space are the biggest considerations because everything else can be changed.

Posted by: guest at May 28, 2008 12:58 PM

12.50 -

Fair enough, comment on GE was too harsh (they do make good stuff).

I agree with your comment that you would rather not add to the bottom line, but my comment applied to a situtation when two condos (Oro, Toren) are similarly priced, the better appliances are definitely an advantage (though not as much as other factors).

Ultimately, if Toren is going to suceed, it has to rise above the competition. Appliances are one factor. There are several others, some of which are more important. To be honest, the biggest things for it are the unique architecture and the better floor plans. Have you seen what a 600sqft 1BR looks like at Oro?? The bedroom (sleeping alcove, actually) doesn't even get a window!

Posted by: guest at May 28, 2008 1:05 PM

what I want to understand is, where is all this money coming from, keeping prices so high? really. We moved here from the UK with what we thought was a pretty big chunk of change, and it's not like the UK is cheap for property, but wow - what is going on here is beyond me. I mean, brooklyn is nice, I love park slope (where we hoped to live, were prices a little more sane) - but we're considering heading back to the UK because we can get more for our money there - and I NEVER thought that would be the case! am really curious though, how so many people seem to have the money to pay over $1 mill for a two-bedroom apartment in an ok neighborhood, or well above that in a "nice" one - and as for houses, again there seems no lack of takers for multi-million dollar homes in brooklyn (am amazed someone paid $1.75 mill for that small frame house on 13th st! why oh why?). cannot understand how brooklyn seems to be completely unaffected by the credit crisis slowing things everywhere else in the world. I think if it were going to hit here, it would have by now.

Posted by: guest at May 28, 2008 1:06 PM

To the indvidual who said Miami has only 600,000 people, you are very wrong. Miami-Dade County has 2.5 million people. The City of Miami is a very small part of what people consider "Miami" and still has a population of 800,000. This does not include Miami Beach or Coral Gables. The condo building being done in Williamsburg, Downtown Brooklyn and on 4th Ave reminds me a lot of Miami condo building although nothing in the country is as crazy as Brickell.

Not the what, or am I, I just don't know anymore...

Posted by: guest at May 28, 2008 1:07 PM

Ok, then 1:07. If you want to include ALL of Miami-Dade County, the inventory doubles to about 60,000.

Still twice what it is in a city 4 times as large.

Phoenix has inventory over 50,000. As does LA, and Las Vegas.

Manhattan's is not yet even 10,000.

1:06 - I don't believe for one second that you are from the U.K. NO ONE from there would be suprised to see a house sell for 1.7 million, when that is what you'll spend to get an OK 2 bedroom in London. You don't fool me for one second.

I have a friend who bought, what was essentially a studio in London and it cost the equivalent of 950K USD.

Posted by: guest at May 28, 2008 1:15 PM

You aren't the What.

The What is dead to me. You've had your moment, now it's over. No one will ever believe you are the real What.

Sorry dude. Hope you enjoyed your 15 minutes.

Posted by: guest at May 28, 2008 1:19 PM

The fake, The What,

Didn't you see...people ARE buying condos.

15 in April 2007, 43 in April 2008, in Park Slope.

Seems all your dreams and fantasies of people not buying property have gone down the toilet.

Along with, what little credibility you ever had.

You are over.

Posted by: guest at May 28, 2008 1:28 PM

actually, 1:15, I am from the UK, but have it your way.

of course one can buy a £400K studio in London, in a prime area of a central district, just as one can in a very expensive building in a prime area of Manhattan. my point is that we came here not expecting to find crazily high prices in Brooklyn, which sorry but in my book is far from equivalent to living in one of the fancier areas of Manhattan. I like Brooklyn very much but we're just not prepared to pay such high prices to live there. Obviously many others are, though, so it shouldn't be a problem for you to sell your place :-)

My question is how is it that even in this supposed credit crunch, there are so many people prepared to pay an awful lot for small apartments and houses in brooklyn, and who seem to have the money to do it. I don't believe that the presence of Europeans in the market is what's keeping prices high - there are just not that many of us here and when we do come we don't all have piles of Euros or GBP with us, contrary to popular belief...

Posted by: guest at May 28, 2008 1:30 PM

Fox reports henhouse is secure.

Posted by: guest at May 28, 2008 1:32 PM

You aren't the real What.

Stop posting.

No one cares anymore.

Posted by: guest at May 28, 2008 1:38 PM

1:15

You just posted Manhattan inventory to prove your point in comparing Miami to Brooklyn...nice try. What is the inventory in Brooklyn...it would be a little more relevant to the discussion.

Posted by: guest at May 28, 2008 2:05 PM

2:05...keep grasping for straws dude.

anyone who wants to say that brooklyn is in any way, shape or form in as bad shape as miamik, is on crack. the inventory in brooklyn are at historically low levels right now, while miami's is the highest it's ever been.

do you read?

Posted by: guest at May 28, 2008 2:13 PM

2:05 - in case you missed it, this article was about the increase in prices and sales volume of brooklyn condos in 2008.

not decreases.

you might be better off going to curbed.com where you and your other bitter renter friends can gang up on sneaky pete.

Posted by: guest at May 28, 2008 2:14 PM

1:30 Most of the buyers for the more expensive places are trading up. This is all predicated on the influx of people who are willing to buy their old units. Kids with parents with money or all those new MBAs going to Wall Street (fewer of them these days). It's like a giant Ponzi scheme.

Not a bitter renter -- own $1MM+ in Broolun

Posted by: guest at May 28, 2008 3:20 PM

neither am I and I rent

Posted by: guest at May 28, 2008 4:02 PM

3:20 - not sure that's totally true. I went to a 2000 sq ft condo from a 1000 sq ft place and I sold to a couple with a kid. i think the majority of buyers and sellers are couples.

Posted by: guest at May 28, 2008 4:16 PM

If you think prices are going up, why not overpay? You'll just make more money by using more leverage.

Unless of course, people get tired of overpaying or the banks decide prices aren't going up infinitely or the I-bankers who bring the new money to allow all the trade-ups lose their jobs, or the aging brownstoner pioneers notice that Vermont has gotten a lot cheaper and has less concrete.

Posted by: guest at May 28, 2008 4:25 PM

I love the argument that people will all of the sudden up and leave for Vermont or some other alleged utopia.

And do WHAT, exactly? Vermont is lovely, but jobs are scarce and most people used to the hustle and bustle of NYC have little use for Vermont, outside of a vacation destination.

I don't know where you live, 4:35, but all my new brownstone owning neighbors look about 35.

They don't appear to be leaving anytime soon.

Posted by: guest at May 28, 2008 4:42 PM

I think a lot of singles are buying at even younger ages also. Especially those who think they will be in New York for the long haul. As finding a mate becomes increasingly difficult, the huge amount of homosexual people in NYC and the later and later people tend to marry and have kids, these same people are interested in forming a sense of stability by buying property.

I see it over and over again. Single people from 25-35 have been a HUGE boon to this market in the past few years. Especially in Brooklyn.

Posted by: guest at May 28, 2008 4:45 PM

Hey 1.15 - I'm from the UK and it seems clear to me, as we say there, that the sellers of that place saw your friend coming.

Posted by: guest at May 28, 2008 5:23 PM

1:30- I second the comment that its family money. I was treasurer in my old Park Slope co-op. Every single person who bought after me (had family help with the downpayment. In a couple cases, the family gave them the full purchase price. A lot of times its hard to trace the money if their clever, unless you really know what to look for and what to ask. When you see situations where the down pmt is $500K and the salaries are only $100K, you know something is up. The thing with co-ops is that the board can be as nosy as they want to be (uncomfortable if you're on the outside trying to get in, fun if you're already on the inside).

How do you think all these creative artsy writer/musician/teacher/save the world types can still afford Park Slope. Was a real eye opener to a self-made kid like myself. Took me years of hard labor to save up a down pmt. I would not have minded a little help. Not at all.

By the way, get over your Manhattan vs Brooklyn bias. The paradim shift is permanent. I can now afford to live where ever and vastly prefer Bklyn over Manhattan, like most of my neighbors.

Posted by: guest at May 28, 2008 6:22 PM

Dear 6:22:

You think it's "fun" to "trace the money" and peer into people's finances?

What a power-hungry a-hole!

Typical Co-Op Board Member.

That's why I swore I would never buy a coop again.

Posted by: guest at May 28, 2008 8:21 PM

i'm guessing you never swore you would buy a co-op again.

i think rather you wish you had two dimes to rub together.

i enjoyed 6:22's post and agree completely.

condos are glorified dormitories. never know who's going to move in next door and trash the place.

no thank you.

Posted by: guest at May 28, 2008 9:17 PM

4:42 -- Why do you think that only buyers are relevant? For market prices to go up, there have to be more buyers coming in with new money than sellers retiring/downsizing on the old money.

Recirculation of profits from NY real estate to buy more NY real estate can't do it alone.

For the pioneers, when the brownstone they bought for $20k is suddenly worth $2m lots of options open up that don't include working past retirement age, and, oddly, not all of them involve remaining invested in overpriced NYC real estate.

Posted by: guest at May 29, 2008 8:47 AM

8:21, I opened by books to get into the co-op, so why shouldn't I expect full disclosure from the newbies. On a co-op board, you get to know where all the skeletons are buried. Now, if that ain't a barrel of fun, I don't know what is. If you live in a co-op, you have to decide if you're going to be one of the passive follow along sheep or if you're gonna actually run things. I prefer running things.

I sold my co-op for an embarrassingly large profit, and rolled into a brownstone. Most happy to be rid of the co-op scene and politics.

Posted by: guest at May 29, 2008 10:30 AM

"For the pioneers, when the brownstone they bought for $20k is suddenly worth $2m"

In Park Slope, this process took over 30 years.

I don't call that "suddenly"

Posted by: guest at May 29, 2008 1:07 PM

Actually, it took 25 years to get to $1m, and 4 to double that. The last doubling was pretty sudden. But whatever, the point was not the suddenness. The point is that ordinary economic rules still apply.

Posted by: guest at May 29, 2008 4:48 PM