B'kln Townhouse Prices May Not Rise Forever
March 16, 2006 — Townhouse sales in Brooklyn surged during the second half of 2005 as a strong economy and low interest rates attracted buyers, according to a report released today by Halstead Properties. Yet Halsted Chief Economist Gregory Heym said the market may change as supply begins to catch up with demand. The balance…
March 16, 2006 — Townhouse sales in Brooklyn surged during the second half of 2005 as a strong economy and low interest rates attracted buyers, according to a report released today by Halstead Properties. Yet Halsted Chief Economist Gregory Heym said the market may change as supply begins to catch up with demand. The balance has shifted and buyers have more options, he said, noting that the borough now has more than 200,000 townhouses. Inventory has loosened and there are more apartments on the market, but the pace is slowing down from a record.
During the second half of 2005, townhouse prices in Greenpoint and Williamsburg rose fastest, with the average reaching $751,095, up 58% from a year earlier, partly because the average size of the homes grew. On a per-square-foot basis, prices were up 21%. Other areas in Brooklyn also saw solid gains during the second half of 2005: prices in Bedford Stuyvesant, Clinton Hill and Fort Greene rose 39%, to an average $594,481; townhouses in Boerum Hill, Brooklyn Heights, Carroll Gardens, Cobble Hill and Park Slope sold for an average $1.5 million, up 25%; and prices in Bay Ridge, Bensonhurst, and Dyker Heights climbed 22%, to an average $726,965.
BK Townhouse Prices May Slow [Crain’s]
Short little moronic article. Talks about rising townhouse prices.
Then says there are now more than 200,000 townhouses.
gee – I can remember back in my youth there were only 199,500 -amazing how they are springo up allover).
Then says the number of apartments for sale is increasing. Yeah- so are we talking about apentments or townhouses?
Sounds to me the author has no clue – and does not know NYC housing stock.
And Matt, you have to ask yourself this question: In 10, 15, 20 years, how much do you think these bstones will be worth, assuming decent nabe, location, etc.
Do you think today’s purchase price will seem “overpriced” in 15 years? Because unlike co-ops and condos, bstone purchasers are in it for the long-haul. In many cases, their adult kids will move into half the bldg, and then inherit it, so the bldg stays in the family for multiple generations. In 50 years, do you think somebody’s kid is going to be ever so thankful their parents purchased an “overpriced” bstone in 2006.
Yeh, I do think so.
Matt, I don’t know where you get the idea that people who buy bstones have huge mortgages. Most people I know, including myself have relatively low loan-to-value. And a lot of recent buyers are putting big dollars down from bonuses or from parents. And if anything, the virtually tax-free rental income is a good way to put some extra money away.
I’d say, its not the mortgages that are the killer, it’s the cost of maintenance, utilities, and upkeep. A lot of the maint and upkeep can be deferred during lean times – not for forever, but for a number of yrs.
To me it will always be about location and transportation, and I believe that historical brownstones will keep going high according to the rarity theory.
What people should keep in mind though is that people who buy brownstones usually have huge mortgage and the day the Economy will really go down and people starting getting fired, then people won’t be able to pay their mortgage and will have to sell.
it’s all about cycles, economic and RE cycles are related so don’t think your 100% safe buying overpriced RE.
I agree with the poster who noted that crime rates will be a prime factor in future housing prices. Nothing will make folk take a loss & move faster than violent crime.
Remember, we’re enjoying a low crime rate currently. In high-crime times, things look very very different. I can remember when Prospect Park (yes, the PS side) was a no-go zone after dusk.
I hope it doesn’t happen again, but these things tend to be cyclical, and folks highly leveraging to buy these properties should keep it in mind.
House I’ve been salivating over for a couple of months on Ft. Greene park just sold. The asking was hefty and I am curious to know how much less (if at all) the offer was than the asking. Betcha it wasn’t far from the asking.
Now tell me how much brownstone prices are dropping.
anon 10:04
do you understand the concept of nominal dollars – it didn’t say they would never fall. I said nominal prices will go up for ever. that’s a pretty safe bet. doesn’t make it a good investment. Its just about inflation
To Anon at 9:56: these neighborhoods boast many of the very best houses in Brooklyn, but there are also a lot of blocks with much smaller buildings or really deteriorated buildings, and the prices these sell for are probably a serious drag on the area’s overall average. I wonder if there will be a discount on pricing compared to Park Slope until the schools improve?
Reasons purchasing a brownstone in prime Park Slope was the best invmnt I will ever make:
1) I draw a distinction between antique brownstones and newly minted townhouses or condos. 1fam and 2fam intact turn-of-the-century bstones are becoming more extinct with each passing month. In order to buy mine, I had to fight off a bidding war with a couple of developers who were salivating at the prospect of taking the bldg and chopping it up into condos. Once that happens, its never getting converted back to a 1 or 2 fam bldg.
2) Zoning restictions btwn 4th Ave and PPW will limit the housing stk in this area. Sure, 4th Ave will get built up, but that will only enhance, not detract from the nabe. I am still sitting on prime property in a low-density protected zone, no matter what.
3) There is only one Prospect Park and I’m sitting right down the street from it. Insomuch as other nabes like Bed-Stuy may become alternatives with similar housing stock, it just ain’t gonna be the same. Somebody will be willing to pay for primo location.
4) Excellent transportation alternatives.
5) The other day, someone remarked that it will be increasingly common for parents to hand the bldg down from generation to generation. I’ve seen this trend in the Slope for a long time and it will continue.
6) Total strangers walk up to me all the time to ask about my bldg. There is a level of interest and fasination with these bldgs that is not going to go out of style. Unfortunately (or fortunately as the case may be) they are expensive to buy and expensive to maintain, so it takes very deep pockets to own one these days. It’s only going to keep getting pricier.