Market
June 23, 2008
Dumbo on the Cheap: Half Mil+ Entry Fee
Dumbo NYC scoured StreetEasy to compile a list of the neighborhood's cheapest condos. Surprise: There aren't many bargains. Dumbo units with the lowest price tags that are currently in contract include a $550,000 spread at 70 Washington and a $590,000 condo at 100 Jay. The price-per-square-foot on the relative bargains ranges from $686 to $745. The lowest-priced Dumbo listing that's not in contract is a $599,000 unit at 100 Jay. The most interesting aspect of the piece is its comparison to a similar survey of the hood's cheapest condos 10 months ago. Last August, there was a unit available for $475,000, though the price-per-square foot on the two least-expensive condos topped $800, quite a bit more than what we're seeing today. (These weren't in contract, so it's not a 1-to-1 comparison, and we're not accounting for month-by-month inventory fluctuations.) So, does the drop in $/psf indicate a wee correction in Dumbo or does this comparison include too few data points to mean much?
Lowest Priced Dumbo Condo (and Other Tidbits) [Dumbo NYC]
Photo by backharlowroad.
June 12, 2008
Condos Go Rental; Development Sites Go Nowhere
It's happening. More and more condo developers are switching horses in midstream, transforming projects that were originally going to be condos into rentals, says The Sun. The big Brooklyn examples are the Kodachrome in Bed-Stuy and Dumbo's 99 Gold (though both are ancient news). David Maundrell, the president of marketing firm aptsandlofts.com, says 95 percent of his company's projects a few years ago were condominiums, but around 60 percent are now rentals. "There's been an enormous shift in the past 12 months," the senior managing director of Beck Street Capital, Kevin Comer, said. "Lenders only want to lend on cash flow projects. They want to be certain that they have a fallback as a rental that works.' And those are the projects that are actually getting built; according to Comer, "We have seen an increase in the number of investment opportunities that we see that are fully permitted development sites where the developers are just trying to get out of them."
Credit Crunch Turns Condos Into Rentals [NY Sun]
Photo by Lisanne!.
June 6, 2008
Red Nabes Lose: Condo Price Cuts all the Rage
All the neighborhoods in red above saw more price decreases than increases on condo units between mid-February and mid-May, according to StreetEasy numbers the Real Deal crunched. The data shows that there are more price cuts these days than price increases in both Brooklyn in Manhattan. In Brooklyn, there were cuts at 183 units, with the average price decrease totaling $42,195. At the same time, there were 103 listing increases averaging $34,660. The stats for Williamsburg are probably the most interesting: The neighborhood had the greatest number of price changes, 104, but it ends up green on the map because there were a bunch of price bumps at Northside Piers. Take Northside Piers out of the picture and there would have notched 40 decreases and 11 increases. Clinton Hill and Park Slope fared poorly in the tally, with the former lodging reductions on 24 units and increases on only 3, and the Slope seeing a total of 18 decreases and zero increases. Brokers say the numbers for the two neighborhoods may have reflected listings where brokers/developers had loose definitions of the two neighborhoods' boundaries (Bed-Stuy and South Slope, maybe?). Overall, not the prettiest picture.
Condos on the Chopping Block [The Real Deal]
Graphics from The Real Deal.
U.S. Foreclosures Continue to Soar; NYC Still Not Bleeding
More bad news about the national housing market: Approximately 1 in 11 mortgages in the U.S. were in foreclosure or past due at the end of March, according to a report by the Mortgage Bankers Association. The Times notes that 4.8 million loans were in foreclosure or had notched late payments, and the trend has spread beyond subprime-loan holders. The problems are worst, it's not surprising to hear, in Florida, California and Arizona. An AP article on the findings says the delinquency rate jumped to 6.35 percent in the first quarter of 2008, and the rate of new foreclosures and late payments were the highest on record since the late '70s. A spokesperson for the Mortgage Bankers Association expects foreclosures and late payments to continue to escalate as home values in many areas continue to plummet, killing off resale potential. In related news, New York City has still remained mostly insulated from the foreclosure epidemic, according to a report Property Shark released earlier this week. The data site's findings for May showed that New York City's new foreclosure rate was down from April, though still up significantly from this time last year. There were 313 new foreclosures in May in all five boroughs, with a whopping 177 of those in Queens. By comparison, Property Shark recorded 55 new foreclosures in Brooklyn last month, and even fewer in every other borough.
About 1 in 11 Mortgageholders Face Loan Problems [NY Times]
Record Foreclosures in 1st Quarter [AP via NY Daily News]
Market Reports [Property Shark]
June 3, 2008
Report: Investment Sales Mostly Hanging In There
Property Shark recently released its first-quarter investment sales report for 2008, and the numbers for Brooklyn show a market that's certainly seen better days but isn't completely tanking. The report tracked the sales of two-, three-, four-, and five-or-more family dwellings/mixed-use properties (so no condos, co-ops or other commercial/industrial buildings). Basically, the worst trend in Brooklyn—and this was true for all the boroughs—is shown in the graph above: There was a 37 percent drop in the number of sales as compared to the first three months of 2007. In fact, every borough did worse than Brooklyn on this score, with Manhattan posting a 49 percent year-over-year decline in sales volume. The median price per square foot and median sale price on investment properties in Brooklyn didn't change much in recent months or over the past year. The median price per square in the first quarter this year was $237, down 3.6 percent from the same period in 2007, and the median sale price was $665,000, up 2.3 percent from the first quarter in '07. The only big drops in median prices between 2008 and 2007 were seen in transactions involving large (4-family and bigger) properties. It'd be interesting to know the extent to which big-ticket brownstone sales are keeping us (barely) afloat.
First-Quarter 2008 Investment Sales Report [Property Shark]
June 2, 2008
Dear Owner: I'm Not That Into Your Pad
By now you've probably read the Times article about negotiating for a home by sending a letter explaining a lowball offer; it's been one of the top e-mailed stories on the paper's web site for a couple days. In it, Rob Lieber drafts sample letters from both the buyer's and seller's sides. Apparently, epistolary haggling is all the rage nowadays in places where the market's tanked. Here's part of the pretend buyer's letter:
Dear Seller:I’m writing to let you know that I would like to make a bid on your property. I love the area and am committed to buying a house nearby. And your home fits my needs. But given that my offer is well below your asking price, I also feel I owe you an explanation. First, consider the big picture. Nationwide, home prices in the first quarter of 2008 fell 14.1 percent compared with the same period a year earlier, according to the Standard & Poor’s/Case-Shiller U.S. National Home Price Index. That’s the biggest decline in the 20-year history of the data. And just in case you’re wondering, during the housing downturn of the early 1990s, the decline was never worse than 2.8 percent. Not only that, earlier this month, the National Association of Realtors pointed to the huge number of existing homes on the market. As of the end of April, the total number was 4.55 million. At the rate people are buying right now, that represents an 11.2-month supply. So buyers have options right now. A lot of them. I’m no different. Your home is great, but it isn’t unique...
Whoa! It's a crazy letter-writing jungle out there. Anyone heard of this happening here?
Negotiating for a House? Start With ‘Dear Seller’ [NY Times]
Photo by The Fuzzy Squid.
May 28, 2008
REBNY Condo Market Report: No Need to Panic (Yet)
The Real Estate Board of New York has started releasing monthly reports on residential sales in Brooklyn, and the one compiled by the trade group for April '08 shows moderate gains in sales volume and prices over April '07. REBNY's data, which is based on sales lodged in city records and is independent of listings on its ResidentialNYC site, shows the average condo sales price last month was $656,784, a 4 percent bump over the average price last April. The largest jump in recorded sales prices was in the South Slope, where new developments coming to market boosted average prices up 96 percent, to $608,824, and there were three times as many sales in the neighborhood as in April 2007. Park Slope as a whole had a big increase in sales volume, with 43 sales recorded last month as opposed to 15 the same time last year. (Full press release on the report's findings on the jump.) The organization is releasing the monthly condo reports "because of high anxiety in the market," says Mike Slattery, head of research for REBNY, who notes that the numbers are influenced in a big way by new projects coming online. 'Course, since the data REBNY uses is based on public records, stats for April 2008 probably give a better picture of the market three to six months ago, since sales take a while to go from being in contract to showing up in NYC records. Nevertheless, based on this report, the condo market isn't looking as scary as some other recent press has made it out to be. Still and all, we'll see...
Condo Market: You Can't Handle the Truth! [Brownstoner]
Photo by the vamlumtimes
Continue reading "REBNY Condo Market Report: No Need to Panic (Yet)"
Dog Days for U.S. Housing; Is NYC Next?
The Times is talking doom and gloom about the national housing market after stats were released showing that home prices fell 14.1 percent in March as compared to the same month last year. While primo New York City—Manhattan in particular—has remained mostly immune to the rest of the country's housing woes, other once-resilient markets are faltering. Seattle, for example, has only started posting a huge rise in unsold inventory. Some say the housing market hangover could last for another couple years. “It’s like eating beyond your stomach’s capacity,” said Ronald J. Peltier, the chief executive of Home Services of America, which owns real estate brokerage firms across the country. “We have huge indigestion.” According to an article in the Observer, though, New York City may yet have to reach for the Mylanta: Recent rises in inflation (the price of a six pack of craft beer is up $1!) and crime, coupled with lots of job losses, could very well mean the worst is yet to come.
In Housing, the Strong Turn Weak [NY Times]
Lead Indicators? The Price of Beer, Hurricane Season [NY Observer]
Photo by bburke782.
May 21, 2008
Multiple Price Cuts for Heights Houses
Not even Brooklyn Heights, the bluest chip in the borough, is proving immune to the pressures of a weakening market. Exhibit 1: Three of the lower-priced houses on the market in the area have recently had to undergo price reductions in their bids to find buyers. The most surprising of these, in our opinion, is 72 Middagh, a 3,450-square-foot former school house with its own parking that recently underwent a pitch-perfect renovation. This one started out three months ago at $2,995,000 and was just cut to $2,895,000. The historic colonnade of 47 Willow Place was not enough to reel in a buyer at the initial asking price of $3,450,000, so after just five weeks, it too had its price trimmed to $3,200,000. These two cuts follow the unsuccessful efforts of a succession of brokers to unload the suburban-modern carriage house at 43 Love Lane. Brown Harris Stevens, Stribling and Halstead gave it a go for most of last year, starting at an original asking price of $3,500,000. Coldwell Banker took over in February at $2,995,000. With no better luck, they cut the asking price to $2,745,000 at the end of April. Where's the bottom on this stuff?
72 Middagh Street [Corcoran] GMAP
47 Willow Place [Corcoran] GMAP
43 Love Lane [Coldwell Banker] GMAP
House of the Day: 43 Love Lane [Brownstoner]
HOTD: Love Lane Buyer, Wherefore Art Thou? [Brownstoner]
House of the Day: 72 Middagh Street [Brownstoner]
House of the Day: 47 Willow Place [Brownstoner]
May 7, 2008
DoBro's Average Household Income to Double?
The average household income in Downtown Brooklyn and surrounding neighborhoods is expected to double in two years, according to marketing material for 345 Adams Street. Roger Greenstone, who's eponymous firm is marketing Muss Development's two floors of retail in the building, told us he expects to score high-end tenants that will cater to affluent residents in the sorrounding community, a contingency that's quickly taking over. Last year, Scan/US Inc. estimated households in Downtown Brooklyn, Brooklyn Heights, Fort Greene, Cobble Hill, Boerum Hill and Park Slope earn an average annual income of $87,139 based on U.S. Census Information. The Downtown Brooklyn Partnership estimates that number will jump to $172,000 $142,000 by 2010 thanks in part to 27,000 new condos under construction, according to the brochure. (Update: DBP just alerted us to the fact that Greenstone had the number wrong.) Some of those projects are presently stalled, but people have already moved into others like One Hanson Place and construction cranes are everywhere. Even if the increase is not quite double, it will still be pretty significant. See the full data after the jump...
Developer to Air Out 345 Adams Street [Brownstoner]
Chan upbeat about Downtown Brooklyn [Real Estate Weekly]
Continue reading "DoBro's Average Household Income to Double?"