Corco: More Listings, More Absorption
Corcoran just sent out to its brokers and clients some fairly bullish market data about the Brooklyn market. As the accompanying charts show, the number of co-op and condo listings on the market has roughly doubled in the past year while the number of absorbed listings (which presumably means sold listings) rose 26 percent between…
Corcoran just sent out to its brokers and clients some fairly bullish market data about the Brooklyn market. As the accompanying charts show, the number of co-op and condo listings on the market has roughly doubled in the past year while the number of absorbed listings (which presumably means sold listings) rose 26 percent between November 2009 and November 2010. Sales prices appear to have remained fairly steady, except for studios, which rose almost 20 percent on a price-per-square-foot basis. Here’s some unofficial commentary about the North Brooklyn segment of the market from one broker that was forwarded to us: “We’ve seen inventory in Williamsburg begin to show signs of drying up… especially as many new projects which buyers hoped would be for sale have opened up as rentals. The majority of dead construction sites are now showing signs of life, and most are intended to be rentals…leading us to believe that once waterfront properties (EDGE, Northside Piers) sell out, there will be little left to buy.”
I don’t understand what that listings chart represents: total listings they were aware of, or their own in-house listings. If it’s in-house listings, does it take into account the company’s growth?
The reason I ask is the inventory for manhattan looks NOTHING like that – don’t know if this will work but from Urban Digs: http://urbandigs.com//chart.php?k=5ecd46c8afffb3e73ca48e9b65a61c59. I find it odd that the 2 markets would be totally out of sync.
Also, if that does carry any weight for market-wide, I’d be shaking in my boots if I was a Corcoran sales agent: I wouldn’t be happy to see inventory double from last year this time at all, especially with mortgage rates creeping up for whatever reason.
Random ignorant question – what does ‘absorbed’ mean in this context?
You really shouldn’t believe comments until you check what’s closed for yourself. At the Edge, the first building has 360 units (at least that what the developer said at first); that’s the one that’s ready and finished. Now, to allow buyers to get cheaper loans (only available if a building is 51%+ in contract), the developer has virtually sliced the building, with phase I being floor 3-9. It is this phase that’s currently 31% “sold.” It should tell you something that even trying as hard as possible (with fake phases and counting all contracts), this is the best the developer could do.
With all the games and obfuscation, and the personal interest most of the participants have in making believe that the project is successful, the only reliable indicator is Acris. So far, 17 recorded sales. That’s it. There’s a lawsuit ongoing, and past lawsuits have been won on the basis of ILSA.
I’m not denying that the rental market in Williamsburg is doing well. In fact, come April and May, when the college kids start renting and the general real estate has its seasonal swell of activity, I imagine that Williamsburg is going to be very competitive compared to even parts of Manhattan.
But the chart above is for SALES, not rentals. Having a lot of rentals- or condos turned rentals is not going to necessarily make the market for sales better. Williamsburg still trails in ppsq compared to the other desirable neighborhoods of North Brooklyn.
after all this talk, the reality is there has been no significant building for over nearly 3 years and supply has slowly been absorbed – that will lead to a shortage (doesn’t mean nothing, just limited options) in late 2011. this has happened repeatedly in new york city history, this is nothing new
Rented projects are just that, rented. They won’t and can’t go on the market at once, but in stages. We’ve seen this before.
Demand for rentals is white hot in Willie-B, and much stronger than expected in the Flatbush Avenue buildings, showing there is money there.
Why yes, wine lover, I am very familiar with Williamsburg real estate, as I shopped there for a home this summer! So, I happen to know a good amount of what’s out there.
Shadow inventory refers to the properties that developers keep unlisted, so they don’t clog the market with too much, lest they dilute the value of the property they’re trying to sell. It’s better for them if you think that the place is filling up (and judging by your perspective, you seem to think that they are)and that if you don’t act now, you’ll be priced out forever. All real estate developers do this, by the way. But Williamsburg is a prime example of this because there are just so many of them.
You’re right that the EDGE, 80 Met have had move-ins for some time, but the majority of the apartments in those buildings haven’t been filled. First of all, it’s really hard to get financing for a building that is less than 50% sold and none of those that you listed are at 50% yet. (By the way, you can NEVER trust the numbers that they throw at you in terms of percentages, because they often use a lost of fuzzy math to make it look better.) Secondly, even once the buildings are sold, it’ll be tough (compared to say Brownstone Brooklyn or prime Manhattan) because the inventory is continuing to grow and there is little in the way of zoning restriction to limit the availablity of future units and/or developments. Not to mention that a number of the sold units are now in buildings where rentals also take place, which again, lowers the value of your property.
And finally, you shouldn’t be trusting numbers an anonymous person posts on streeteasy.
And this is what I know.
“The Edge buildings are about 500 units,31% sold/in contract… Less than 20% occupied.””
there’s also a bunch of people who are trying to get out of their contracts.
pretzel – i think what these new inventory numbers are showing is the “shadow inventory” from last year or so finally all coming online. the biggest developments – NSP 2, the Edge, Met 80, Warehouse 11 have all had C of O’s and move ins. What other large projects are there? Anything else has to be small/smaller. The new big project is Domino, but that’s years away. What shadow inventory are you referring to? Are you familiar with WB real estate? List the sites.
I think that the point being made from the newsletter is that what WB has seen in the last year and half is that buildings that have the financing and stability to come out as condos have, and that any other sites that were problematic have come out as rentals. so, it’s not a crazy assumption to say that if you are seeing a stalled site, it mostly likely will end up as a rental because that’s what has happened. The rental market is so strong in WB, that you can see a loss of what would be available for sale go to being a rental.
also, there are very long threads on Streeteasy about both nsp2 and the edge. saying that there are only 17 sold condos at the Edge is just absolutely silly. maybe that’s what shown on somewhere, but here’s what i copied from the Streeteasy thread on NSP 2 which was written a few days ago:
“the number of unit(s) at NSP and Edge is comparable.
NSP1 and NSP2 are approx 440 units (220 each). Tower 1 is basically fully sold and occupied,Tower 2 is 42% sold (20% occupied,the rest in contract). These percentage(s) refer(s) to the whole development.
The Edge buildings are about 500 units,31% sold/in contract… Less than 20% occupied.”
If this is about right, then that’s like 150 apts in the Edge that are sold. Closings are happening right now.
hi guys-
i wrote this comment, and anyone who is actually looking for a good, reasonably priced apartment to purchase(bedford avenue stop) knows what i’m talking about. I live in williamsburg and i am here 24/7. I have spoken to just about every owner of a medium to large sized vacant/stalled, or under construction site from broadway to mcCarren park and from the water to the BQE. Almost everything new coming up is rental. Stalled sites are either coming back to life soon or going to be held up by banks for a long time to come. So for a buyer out there NOW (when rates are still reasonable) looking for something at $600-650/foot there is little inventory on the bedford stop. If you want to rent- you’re in luck (if you can pay the $40-50 per foot these rental developments are getting) but if you want to buy- other than maybe a few 4-8 unit generic developments… there isnt much to look at!
This report is discussing inventory and absorption Brooklyn-wide, its not specific to williamsburg. And believe me… there’s not much left in the “shadow-inventory” dept in Bedford ave williamsburg(for sale, excluding affordable housing and rental). Give me an address and i’ll prove it to you! banks are not financing new construction right now, and there are no more tax abatements for new construction, so there is no motivation for developers to build. They’ll wait until the inventory is really low and the prices increase and then sell for $750 a foot or more in a few years.
my buyers are seriously frustrated at the lack of good inventory available. I’m surprised more people are talking about it.