Brooklyn Prices Up 8% in '06, Appraiser Says
According to appraisal firm HMS Associates, the average sales price of single- and multi-homes in Brooklyn rose 8 percent in 2006, despite a drop in the number of transactions. “The Brooklyn residential market was very strong in 2006,” says HMS Associates founder Sam Heskel. “We expect 2007 will be another good year, but home prices…
According to appraisal firm HMS Associates, the average sales price of single- and multi-homes in Brooklyn rose 8 percent in 2006, despite a drop in the number of transactions. “The Brooklyn residential market was very strong in 2006,” says HMS Associates founder Sam Heskel. “We expect 2007 will be another good year, but home prices will come back down to earth somewhat, with transactions up moderately.” In Brownstone Brooklyn, the biggest price increase came in Brooklyn Heights, where prices jumped 16.6 percent, from $1,831,857 to $2,136,891. The study also cites big rises in Boerum Hill, Carroll Gardens, Williamsburg, Bay Ridge, Park Slope, Greenpoint, and Crown Heights.
Brooklyn Home Prices Rose Nearly 8% in 2006 [Market Wire]
Photo by Adam Brock
“WT’s 1994 Price = $209K
Present Value = 1.04^13*$209K = $348K
WT’s “appraised” 2007 Price = $1M
Loss = 65%”
idiotic.
since this IS a blog read by a ton of bronwstone owners, i would like people to come on here and comment if they have indeed lost 65% on their real estate investments.
i would guess that most people have GAINED that much. anyone who’s been here more than a couple years.
“I think it’s a terrible time to buy and an excellent time to sell if you KNOW you want/need to do so within the next ten years or cannot afford a fixed rate at this time.”
so you think it wiser to sell now and then what? do you have any clue about anything? to rent a similar 1 million place that you use as a model, you’d be looking at probably $10,000-20,000 a month on rent.
and considering not you or anyone else can predict when the next economic boom will be, i think your comments are pretty skewed and not based on anything factual. for all you know, the next economic boom could be 4 years from now, in which case you just gave some pretty stupid advice.
If brownstone prices were to drop 50% it would not mean it’s a bad time to buy right now, it means it’s time to leave the country. That’s a very dire situation you are predicting. Why are you still here? Why not move to London?
i agree that being affordable is not the barometer here. it is the case with everywhere in the world that if you can’t afford this place, you move to a different one. there is an entire borough of nyc….(the bronx) that remains completely and totally affordable to almost everyone. yes, many people may not want to live there, but it’s still there for the picking if someone feels the need to buy a place that they can afford. there are parts of queens, outlying part of brooklyn, etc. i don’t think manhattan or prime areas of brooklyn will ever again be affordable, but no one ever said that EVERYWHERE has to be affordable to EVERYONE.
if it were, this would be called communist russia. not nyc.
Wholeheartedly agree with WT Economist. I predict brownstone prices will drop 25% to 50% (real terms) by 2010. Home price appreciation throughout the U.S. and even in Brooklyn has historically followed average inflation, about 4%.
WT’s 1994 Price = $209K
Present Value = 1.04^13*$209K = $348K
WT’s “appraised” 2007 Price = $1M
Loss = 65%
Highly generalized model but that’s why I only predict a -25% to -50% real drop. I think it’s a terrible time to buy and an excellent time to sell if you KNOW you want/need to do so within the next ten years or cannot afford a fixed rate at this time. Otherwise, I think prices will rebound significantly five to ten years after 2010 when we have another economic boom.
Right now, most long term indicators point to recession and Greenspan said it himself. Stock market looks like it’s about to take a gradual dive, foreclosures are getting worse, sub-prime is taking a bath and the whole economy was pretty much hinging on housing and refinancing (vicious cycle).
All eyes on jobs.
Disclaimer: In NYC, I’m a renter
I seriously doubt the middle class will be able to afford anything in Brooklyn again. Higher prices doesn’t mean properties are overvalued, it could mean that prices were undervalued in the past. Prices were severely undervalued in NYC in the past, and the market has caught on and corrected itself. How can the middle class be able to afford property in a world class city? It was once possible, but no more. The market correct this freak occurence.
The cost of homes in European cities is insane, it’s so high, it’s true. BUT, they have free healthcare, the schools are way better, AND there are still decent places for middle income and working class to live, in European cities. If we are making any kind of comparison, those things have to be figured into it too.
(Does anyone remember how Brownstone Brooklyn fared during the last housing slump?)
In the early 90’s, the real estate market tanked and stayed weak for several years. One phenomonon was that young couples had a hard time moving out of their places to larger places to start families because they did not want to lose their equity. Coop boards had to deal with requests to rent apartments for market reasons. It was pretty bad and lasted a few years. To give you an example, I couple bought a one bedroom apartment in our building in Brooklyn Heights for 167,000 (1989?) dollars and sold 3 years later at 99,000. (1993?) . That apartment is worth about 600-650,000 right now. There was little sales activity; it really was a slump. That was riding on the recession which began in 91 and the real estate slump lagged that somewhat and lasted a few years. The economic environment was different then – recession, higher interest rates, US going through major corporate restructuring, much higher unemployment than now. Now the danger is not recession, but potentially speculative excesses driven by low interest rates and much more relaxed lending practices. We seem to be “weathering the storm” so far in Brooklyn. The city is in a growth phase, dollar is low (attractive to foreign buyers), there are projected population increases for NYC, unemployment levels low, interest rates still low, and the global economy keeps growing. I have no crystal ball, the market could take a downturn. A key variable in your decision making process should be your time frame driven by your life plans. If you are in it for the long haul, Brooklyn seems a good bet to me.
The point about the relative value of othe cities is a good one….London apartments recently sold for $8000 per square foot!!….makes Columbia circle look like a bargain!