Market
February 22, 2008
Catsimatidis, the Credit Crunch, and the Future of Downtown
The Brooklyn Paper has an article examining whether John Catsimatidis's stalled Myrtle Avenue development is the first of many setbacks for the grand plans to transform Downtown into a primarily residential area. Joe Chan, the president of the Downtown Brooklyn Partnership, says he's seeing more and more developers reconsider their projects as the credit crunch dries up financing. "Do developers developing condos [consider] a rental scenario?” asks Chan. “Do they [consider] a condo project with a hotel component? Absolutely. I think you see a more thorough analysis of their options.” Developers' newfound caution could mean projects are on hold for quite some time, says Ray Quartararo, of Jones Lang LaSalle, and that the full effects of the credit crunch will take years to become fully evident. As it stands now, however, the iffy market will almost certainly put a crimp in some of the ambitious developments the Downtown Brooklyn Partnership expected to see happen in the next five years. In the meantime, plenty of large projects (like BFC's 150 Myrtle, Avalon Myrtle, the Flatbush Flatiron and Clarett's Lawrence Street tower) are all moving ahead, so there's still plenty of inventory in the pipeline. Still people moving into these pads will need a place to shop, and Catsimatidis was supposed to provide some key retail for the area.
Downturn! Big D’Town Project Hits the Brakes [Brooklyn Paper]
Catsimatidis "Taking a Hard Look" at 162 Myrtle Project [Brownstoner]
Downtown Brooklyn in Transition [Brownstoner]
DBP Does Its Five-Year Vision Thing [Brownstoner]
February 19, 2008
Newbie Homebuyers Face New Challenges
It’s the best and worst of times for New Yorkers looking to invest in their first homes, according to the cover story in Sunday’s real estate section of the Times. On the one hand, there’s less competition for properties, prices aren’t skyrocketing, and mortgage rates are low. On the other hand, lenders are wary of giving mortgages to would-be borrowers with less than stellar credit (700 is the magic credit history number; any lower than that, and lenders aren’t going to be falling all over themselves to issue a loan). As a result, some first-time buyers are getting creative. One buyer in Clinton Hill, for example, probably wouldn’t have gotten banks to approve his purchase of a $427,500 condo since his credit score was less than 700 and he only had $20,000 saved for a down payment. HSBC gave him a loan, however, because it has a program for ZIP codes with large minority populations and the buyer’s income was high enough to cover monthly mortgage payments. Another couple profiled in the article had their closing delayed despite the fact that they had good credit because their lender wanted them to take an online course about their mortgage (what a drag!). Any readers having troubles securing their first home loans?
Jitters for First-Time Homebuyers [NY Times]
Photo by bonddidwhat.
February 8, 2008
Fishing for Foreclosures: Can You Make Big Bucks?
An article in the latest Real Deal looks at the recent rash of classes and seminars that teach people about buying properties in foreclosure (apparently even The Donald’s gotten in on the act by marketing a course with an ad that reads "If you're not a millionaire by December 2008, you didn't attend my foreclosure workshop") and finds that investing in foreclosures isn't all that simple—and (no shock here) it's certainly not guaranteed to turn you a quick profit. Rick Sharga, a foreclosure expert at RealtyTrac, says that if you're eyeing neighborhoods with more and more properties in pre-foreclosure (aka "lis pendens") where values are depreciating—East New York, say—“the challenge is to find a property entering foreclosure that has equity…People may have overextended themselves and got involved with very risky financing, and there may not be any equity. In fact, the price of the property over the ensuing period may even be a negative equity situation." Most foreclosure-investment experts say the best way to make money is to look around for pre-auction foreclosure listings (a property usually goes into lis pending a year before it actually makes it to auction) and try to negotiate a bargain price with either the owner or, if a bank has taken control of the house, the lender. Caveat emptor, though: "This is not about getting rich overnight," says Jessica Davis, who runs a foreclosure listing service.
Sniffing Out Deals Headed to Foreclosure [TRD]
Graphic from RealtyTrac.
February 7, 2008
Market Report: Decent Price Gains in ’07, Fewer Done Deals
Another day, another ’07 market report. The latest entry comes from appraisal firm HMS Associates via Crain’s, and it finds that Brooklyn prices were up but the actual number of home that were sold shrank markedly compared to ‘06. HMS says average sales prices rose 4 percent last year, to $634,915; the firm’s stats show average condo prices increasing 7.5 percent, to $587,000 and single-family home prices jumping 10.2 percent, to $669,000. (Those increases are basically in line with the ones published in Corcoran’s year-end report.) HMS’s most intriguing finding had to do with sales volume, or the lack thereof in ’07: The number of sales the report tracked decreased 23 percent, to 3,374. The lower number of sales probably has a lot to do with owners not being willing to drop prices and deals falling through for lack of financing.
Brooklyn Home Prices Up, Sales Down in '07 [Crain's]
Corcoran ’07 Market Report: Brooklyn’s Still Up [Brownstoner]
REBNY: Brooklyn Apt. Appreciation Tops Boros in ’07 [Brownstoner]
Photo by *green*garden*girl*
February 4, 2008
Local Housing Market Headed for the Trash Can?
Real estate experts are convinced that the New York region’s housing market is about to undergo a serious correction, according to an article in yesterday’s Times. Analysts expect the coming bust to be significantly worse than it was in the early ‘90s, particularly in New York’s suburban markets. Nevertheless, Manhattan—and by proxy, pricey Brooklyn—has so far mostly weathered the national housing meltdown, and the decline in values here isn’t expected to be as bad as in our outlying suburbs. During the year that ended in November, prices in the NY metro area fell 4.8 percent, according to Standard & Poor’s/Case-Shiller Home Price Indices—a drop that pales in comparison to Sun Belt cities, many of which saw double-digit declines. Still, economists predict that house prices in the region will drop by at least 15 percent in the current correction. Ouch.
Home Prices Start to Dip, Recalling ’90s Slump [NY Times]
February 1, 2008
REBNY: Brooklyn Apt. Appreciation Tops Boros in ’07
The Real Estate Board of New York released its year-end market report for 2007, and the numbers paint a very positive picture for the year that was in Brooklyn. The report, put together by REBNY subsidiary ResidentialNYC.com and based on city records, shows the average sales price for Brooklyn condos and co-ops increasing 14 percent in 2007 to $494,000, the steepest uptick of all five boroughs. The average sales price for all of New York City increased 11 percent, to $779,000, and Manhattan’s average price was $1.2 mil. Price appreciation on Brooklyn houses wasn’t as pronounced: Single-family homes were up 5 percent, and the average sales price on multi-fams went up 8 percent borough-wide. The stats show a healthier market than the one depicted in Corcoran's year-end report, which recorded the (median, not average) sales price on condos and co-ops up 7 percent, to $590,000.
Corcoran ’07 Market Report: Brooklyn’s Still Up [Brownstoner]
Downtown, Brownstone Brooklyn Development Boosts Market [Brooklyn Eagle]
Photo by brooklyngreenway.