Brownstones, Co-ops Outperformed Condos in Q4
The median sales price in Brooklyn has been in decline for five consecutive quarters, according to Douglas Elliman’s Fourth Quarter Market Overview. The median figure dipped below $500,000 in the fourth quarter of 2008 for the first time since the first quarter of 2006. Average prices were down 5.2 percent from a year earlier and…
The median sales price in Brooklyn has been in decline for five consecutive quarters, according to Douglas Elliman’s Fourth Quarter Market Overview. The median figure dipped below $500,000 in the fourth quarter of 2008 for the first time since the first quarter of 2006. Average prices were down 5.2 percent from a year earlier and 2.8 percent from the prior three months. Perhaps more noteworthy, the number of transactions plummeted from 3,222 in the fourth quarter of 2007 to 1,846 last quarter; the rate of decline has been increasing for the past year. The only good news: The median sales price of brownstones in Northwest Brooklyn rose 12 percent; co-op prices were also up slightly. Update: This flu must really be going to our heads—as one commenter points out, these reports have been out for several weeks. The Manhattan 10-Year report is the new one. Oh well.
…and I don’t agree that prime brownstones will hold up better. Whatever the premium, it was already built in before the 200% run-up from the 90’s. They will suffer a proportional fate.
Maybe I overuse the lag concept (unemployment, national and regional and local price trends, etc.) but that is definitely what is happening with property types. Condo price drops look worse now because they are the riskiest (shoddily constructed and easily financed) and first to “go”. Brownstones will follow after co-ops. They can run but they can’t hide.
***Bid half off peak comps***
DIBS and LincolnLimestone,
Real estate prices are a function of the wealth and high paying jobs in a given area, as well as housing supply and demand. In 1987, 2008 and every broad based recession (1973-1981), wealth declines and housing demand falls over time as high paying jobs leave the city.
What’s important is that this is a broad scale recession affecting the number of high paying Wall Street jobs and a tremendous reduction in everyone’s wealth. Housing prices aren’t going to go through a quick correction, like the stock market. They will fall over time. It doesn’t matter that the early 1990s had strong stock market gains, because Wall Street didn’t add many jobs.
I don’t know how much, but expect prices to decline for the next few years, not months. Not trying to be hysterical about this, but this is going to take years to work itself out.
Vin
Benson- I studied gemology (not quite the same) and am looking in my reference books to see if I can find anything.
“BHO: Brownstone prices are decelerating, but for the time being the rate of appreciation is still positive (thus my general point that prime brownstones will hold up better than other housing stock). For comparison, bear in mind that the rate of appreciation for condos and coops is negative.”
lechacal (pronounciation and background please): You mean “rate of [prices] is still positive”. But of course. A negative rate of prices will follow a deceleration. Simple gravity. Throw a ball straight up into the air and it will inevitabally come down. But right before it reaches its peak altitude, you can say it’s still going up.
The anology by Paul C at March 3, 2009 12:54 PM pretty much nails my point.
***Bid half off peak comps***
“Deriving comfort from 4Q 08 statistics is like experiencing a tremor before a massive earthquake, and saying “hey, these earthquakes are actually not THAT bad!”
This should be quote of the day.
THL;
I stand corrected. You are right, brownstone is a form of sandstone:
http://www.mzarchitects.com/images/PPN/Brownstoneguide.pdf
Note that I am not alone in my (incorrect) impression that brownstone is a form of limestone:
http://www.calfinder.com/library/siding/types-of-siding/brownstone-siding
Well, I learned something today!
😉
THL;
Frankly, I don’t rely on Wikipedia as a source. There was an article in the Times or News about 2 or 3 months ago demonstrating this point by examining the Wikipedia site on NYC.
That said, I might be wrong on this point, though I could swear that I read once that brownstone is a form of lime stone impregnated with iron oxides (hence, its color) and that this mixture makes it a eaker material than pure limestone. I’m going to research this point further.
Are there any geologists in the house to clarify this issue?
Benson-
You better tell Wikipedia then b/c that’s where I cut the definition from:
http://en.wikipedia.org/wiki/Brownstone
I thought brownstone is a sandstone and that is why you see the deterioration you do. It has and always will be an inferior building material, despite its appearance.