Market Pulse: Bullish Words From a Broker
We thought readers would be interested to hear these thoughts on the Brooklyn market that a broker at a major firm shared with us via email a few days ago. The market truly is stronger than ever. It is really nutty in a good way now. There are almost constantly multiple bidders at or above…
We thought readers would be interested to hear these thoughts on the Brooklyn market that a broker at a major firm shared with us via email a few days ago.
The market truly is stronger than ever. It is really nutty in a good way now. There are almost constantly multiple bidders at or above full price now. Things are now routinely selling in a week to 10 days.
Obviously, a broker has a vested interest in perpetuating the perception that the market is strong, but it seems to be consistent with what we’re hearing anecdotally. Does this jibe with what others are seeing out there? Especially interested in hearing from brokers on this one.
The condo vs. coop issue is a big one and a lot of the key factors have barely been mentioned here, including:
-Financing: Many coops require higher down payments, greater financial reserves and higher incomes than condos, where if you can get a mortgage you can buy the unit. I know of several people who make good incomes but felt they could not pass a coop board review – or did not want one prying into their finances. Of course, this also means that many coops may be financially more stable.
-Restrictions on renting/pied a terres/parent buying for child: Younger people are also often more interested in condos because they need the flexibility in case they need to transfer for work, change their domestic situation, etc. Obviously, some owners don’t need this flexibility and don’t appreciate the “transient” feeling that renters can add to a building. However, it is also important to note that many condos have some restrictions on rentals, and many retain the right to approve tenants plus charge large fees to discourage frequent turnover.
-Type of ownership: Some people are uncomfortable about owning shares in a coop as compared to owning property outright. I’m not an expert in this area but have heard that if one coop owner encounters financial problems leading to foreclosure, liens, etc., there is a greater impact on co-owners than with a condo. I don’t know if this is really true though.
Resale: The price differential has been discussed pretty thoroughly here, but the need to get board approval has not. If you may need to sell quickly, some boards can make the process difficult. And again, this could be considered an advantage by people who want the ability to screen one’s neighbors.
Finally, the higher incidence of coops to condos is not really evidence that coops are “better;” instead, it is more a result of coops being the easiest way to convert rental units to an ownership model. You pretty much do not hear of any new construction units being sold as coops today. That being said, people who are exclusively interested in prewar buildings will find few condos available, and those that are will probably be priced at a premium.
Overall, the greater flexibility offered by condos gives them a broader appeal that has made them more popular today – and also enabled a price premium. However, for buyers with certain needs a coop certainly can be more attractive. So chill out everybody!
So true, 8:09am. People don’t always get that. One always sees people here exclaim at a high-priced condo listing, “but they could buy a house for that!”
Different buyers, different needs, different tastes and lifestyles.
Houses (brownstones) and condos are two different markets. Too many people here consier them one and the same.
I sell and list mostly high end brownstones in Park Slope and surrounding areas. I personally listed three houses for sale in the last two weeks. All have offers and contracts out and most went comforably over asking. The objective is to properly price for the market. One a whole, the houses that sit are priced by inexperienced individual brokers who don’t know the market because they rarely sell them and when they are lucky to be the listing agent on a high-end home, they price way higher than the current market. Sellers do a personal disadvanatage by not listing with large firms who co-broke their listings. Small firms do not get the draw and the high income buyers from NYC. More importantly, the small firms do not work with outside firms (co-broke). They may charge a lower commission but lack the experience and inventory of recently sold homes so they can’t provide an accurate assessment of a home’s worth—big problem for high-end sellers. Currently, if a house is on the market more than two weeks without a deal it is overpriced.. Good houses have multiple bidders at or above asking.. The market is Park Slope and Prospect Heights is stronger than I have seen it in the last two years..
We own a house in PLG’s LM and I have to confirm too that there isn’t a “hot” market here right now. But I don’t think it’s lack of interest. We have heard from several friends in other parts of Brooklyn in the last month or two, who say they want to come over and check out LM, b/c they’re starting a house search. But remember the LM inventory is small. There are not many properties on the market at any given time. The ones mentioned above are larger houses that are already fully renovated, in which case brokers shoot for the moon, and hey why not. But the people most interested in PLG right now, of which there are plenty from what we’ve seen, can’t spend quite that much. As for the smaller, more moderately priced houses like more people want, there are some aging, lifelong homeowners who will be selling sometime in the next couple years. I personally know of a couple such houses, that have been lovingly cared for over the years, though aren’t high-end renovated so the prices should be decent. BTW, because a neighborhood, whether this one or others, doesn’t have lots of bidding wars that’s not necessarily a bad thing. These places attract a unique kind of people, we’ve found. More off-the-beaten-path types. And of course, that’s what original Brownstone Brooklyn was. Those who chose Brooklyn over Manhattan back in the day.
4:21 haven’t bought much in this cycle huh?
Yeah… bid over ask, by alot… Whatever the seller is asking + 10% minimum!!! That way I can pay the realtor with the buyers funds, oh wait, I already do that.
6:28 you are not too smart if you bid under ask in the most desirable neighborhoods in brooklyn. Even bidding at ask is worthless in this market. What real estate cycle are you living in? Open your eyes.
I bought my house 2 and a half years ago but am addicted to this site and to following the market. I am really astounded at the prices now. My happiness about it has morphed somehow into being amazed and puzzled. But the truth is that the market moved from a lower number of sales at stable prices late last year to an escalation which seemed to pick up speed at the beginning of the year. This is a hot topic for everyone and we don’t seem to tire of talking about it. In my humble opinion, the housing stock in Brownstone Brooklyn is just stunning, knockout beautiful, the streets are charming and the low rise world we inherited is human-friendly. There are so many advantages to living here that it doesn’t surprise me that the spike in RE prices in Manhattan prompted a real estate revolution in Brooklyn. I am hopeful, I am happy here and am not worried about a downturn. BUT…… the explosion of new building will spill many new units on to the market within the next 2 years. I have had conversations with people who sincerely believe that the brownstone market, inherently fabulous and desireable, will not be effected by this. At some point, potential buyers will start weighing the advantages of the new housing available and potential tenants will also have a lot more housing choices. I am not particularly worried since I am in this for the long term, but at this point, I am not beating the drums for continued price increases.