Douglas Elliman Q1 Report: Down and Downer
Not surprisingly, prices and volume in Brooklyn were both down in the first quarter of 2009 versus both the Q4 and Q1 2008, according to the latest market report from Douglas Elliman. The median sales price fell to $474,600 from $490,000 in the prior quarter and $527,000 a year earlier. Likewise, the number of transactions…
Not surprisingly, prices and volume in Brooklyn were both down in the first quarter of 2009 versus both the Q4 and Q1 2008, according to the latest market report from Douglas Elliman. The median sales price fell to $474,600 from $490,000 in the prior quarter and $527,000 a year earlier. Likewise, the number of transactions was 1,186, down from 1,846 in the fourth quarter and 2,761 in the first quarter of 2008. The median price declines were consistent across all property types: Condos (-8.6%), Co-ops (-11.4%), 1-3 Family (-10.6%), Luxury (-9.2%). East Brooklyn was by far the hardest hit, with median prices plummeting 25% year-over-year. Townhouses in Northwest Brooklyn fared pretty badly, too, with median prices falling to $1,087,500 from $1,287,500 in the fourth quarter and $1,200,000 a year earlier.
Market Reports [Douglas Elliman]
Unfortunately there don’t seem to be any inventory numbers readily available. They may be from Corcoran somewhere but it won’t take into account all the lesser listings like Century 21 and worse, to which, I would bet, some sellers are flocking towards for a lower commission.
Lechacal, nice explanatation and I agree with what you’re saying. If I had to sell, I would do it asap. If I was looking to buy, I would continue to wait. I think it’s still going to get worse for sellers. By the way, a belated but heartfelt congrats on the new addition to your family. I hope everyone’s doing well.
DIBS, your figures at 9:39 are very consistent with what I’m saying, i.e., very few people are trying to buy OR trying to sell right now.
lechacal’s 9:39 first paragraph about sums it up.
Biff…the number of sales in “Northwest” Brooklyn went from 678 in 4Q07 to 173 in 1Q09.
In the “Brownstone” category it went from 94 to 32.
North…245 to 84
South…1,717 to 695
East…582 to 234
Brooklynnative: I will continue to stand behind my prediction that prime properties in prime areas (eg park block limesones in North Slope) will hold up much better than other property classed (and that coops will fare better than condos, and the hardest hit will be condos in marginal areas). Almost all prices are going down, but not all property classes will be equally affected.
Biff and jasetheace: What we are seeing is pretty classic seller behavior as a market turns down from the top of a bubble. Sellers have built in expectations of value based on bubble prices, and think to themselves the downturn must be temporary and prices will come back soon. So the sellers that have the ability to not sell hold off, while the weakest sellers (ie the ones who need the money, have been laid off, etc) sell into the early stages of the declining market. The weakest sellers end up selling on the way down, while the “strongest” sellers continue to hold out while prices decline until it fnally sinks in that what they should have done was go ahead and sell long ago rather than waiting for a return to unsustainable and unrealistic price levels. Perversely, the result of all this is that the sellers who think they have the ability to weather the storm end up missing the bubble pricing entirely, while the sellers who have to sell early get some benefit of the inflated pricing on the way down. It’s similar to the way the first employees to get laid off in a downturn manage to get jobs while by the time the best ones are laid off there are no more jobs left.
I have repeated many times that inventory is the first story, price the second. We are in a transition phase. Don’t worry, inventory will increase as prices continue to decrease. If you are in the market (as I am) keep being patient and you will see many more opportunities at lower prices.
Here’s the data for various categories:
Average Selling Price 1Q09 vs. 4Q07 (arguably the peak):
1-3 Family market: $641k vs. $671k, -4.4%
North: $559k vs. $632k, -11.5%
South: $508k vs. $525k, -3.2%
East: $432k vs. $537k, -19.5%
Northwest: $807k vs. $775k, !
Hardly half off recent comps.
And I agree with Brooklynnative’s assessment in his first post.
jasetheace, it’s not you. What I imagine is happening, at least in “prime” brownstoner areas, is that many sellers are sitting on the sidelines waiting for things to turn around. Out of interest, I monitor the new listings each day in Brooklyn Heights (and often Cobble Hill and Park Slope) and have seen very few new properties up for sale. There have never been a ton of family-sized places available in Brooklyn Heights given the limited inventory, but they seem even more scarce these days.
I’m not at all suggesting prices are not declining for those that are getting sold (I am a member of Team Bear), just saying that both sellers and buyers seem to be very hesitant to do anything at the moment, which is clearly reflected in the significant drop in number of transactions.
Doesn’t bode well for the 1 bedroon on Washington from yesterday getting $399K. Got to wonder about the comps and the appraisers. Even if they did get 399K, would it be appraised at that level? Is it that the brokers just are not persuasive enough with their clients about current realities? Especially since a very nice pre-war on Clinton is offering good sized one bedrooms(with a real kitchen) for 1400/month. On a rent/buy ratio 399K has as much to do with reality as Little Edie did.