Getting a Jump on the Q1 Post-Mortems
In a case of premature data ejaculation, appraisal firm HMS Associates has put out its first quarter numbers on the Brooklyn real estate market with the last two weeks of March still unreported. Nevertheless, the trends are obvious. Sales volume? Down. Average sales prices? Down too. For two years, sales volume has dropped, but prices…
In a case of premature data ejaculation, appraisal firm HMS Associates has put out its first quarter numbers on the Brooklyn real estate market with the last two weeks of March still unreported. Nevertheless, the trends are obvious. Sales volume? Down. Average sales prices? Down too. For two years, sales volume has dropped, but prices have not, said Sam Heskel, executive vice president of HMS. Now, as last, prices are falling into line with the reality of diminished sales volume. Volume between January 1 and March 15 of this year was off 35 percent from the first fourth quarter of last year; average sales prices around the borough fell 12 percent. Versus the first quarter of last year, volume was down 65 percent and prices were off 8 percent. But not all neighborhoods felt the pain equally; nor do their diverging performances conform to any kind of logic. According to HMS, prices were actually up in Greenpoint, Carroll Gardens, and Sunset Park while they dropped dramatically in Brooklyn Heights, Sheepshead Bay, and Fort Greene. Rather than showing much about any particular market, these results simply underscore the shortcomings of using average, rather than median, prices to get a snapshot of trends. In case you were worried they’d end on a negative note, Heskel comes through with a drum-beating quotation: If there is a silver lining at all, this is an excellent time to buy for those who are in a position to do so.
BROOKLYN HOME PRICES PROJECTED
TO DROP BY EIGHT PERCENT IN FIRST QUARTER OF 2009
Sales Volume Expected to Plummet 65%
from First Quarter 2008, according to HMS Associates Report
New York, March 30, 2009….Brooklyn home sales are on track to continue their downward spiral in the first quarter of 2009, according to the latest report prepared by real estate appraisal firm HMS Associates.
HMS studied 15 neighborhoods between January 1, 2009 and March 15, 2009. The firm found that the average home price fell by eight percent from $641,464 in the first quarter of 2008 to $589,135 in the period between January 1, 2009 and March 15, 2009. The total number of sales dropped 65% from 1004 in the first quarter of 2008 to 347 between January 1, 2009 and March 15, 2009.
These are not full quarter numbers, cautioned Sam Heskel, executive vice president of HMS. There is a percentage of sales out there that must still be recorded. However we suspect that the trend will not change much over the remaining two weeks.
On a consecutive quarter basis, the average home price dropped 12% and sales volume fell 34.7% between the fourth quarter of 2008 and the period between January 1, 2009 and March 15, 2009, HMS said.
For two years, sales volume has dropped, but prices have not, said Heskel. Now, as last, prices are falling into line with the reality of diminished sales volume.
The average home price figures come from HMS’s comprehensive quarterly study of 15 representative neighborhoods in Brooklyn and include one-, two-, three-, and four-family homes, condos, and co-ops. The report includes neighborhoods that show both price increases and decreases and are deemed together a fair reflection of what is happening in Brooklyn as a whole, according to Heskel.
While the average price borough wide dropped eight percent so far this year, there were significant variations in different neighborhoods. Prices rose by double digits in Greenpoint, Carroll Gardens, and Sunset Park but fell by steep margins 24 to 38 percent — in Brooklyn Heights, Sheepshead Bay, and Fort Greene. The number of homes sold fell in all 15 neighborhoods, with the biggest drops in Williamsburg, Carroll Gardens, Boerum Hill/Cobble Hill, Clinton Hill, Fort Greene, and Bay Ridge.
Because the volume of sales has dropped off so greatly it is difficult in some neighborhoods to get an accurate assessment of what is going on in the quarter, Heskel said. In some instances you have a huge price increase, but based on only one or two sales, so the increase is skewed. It’s more useful to look at broader trends, which show price gradually declining along with the slowdown in sales volume.
The picture was much bleaker in some neighborhoods not included in the study, such as Bedford-Stuyvesant, East New York, Bushwick, and Brownsville. Foreclosures were still a problem in the four neighborhoods of 58 Brooklyn foreclosures listed in the first quarter by PropertyShark, 30 were in these four areas. Heskel also noted that the level of foreclosures works out to one foreclosure for every six homes sold in Brooklyn.
Here again, says Heskel, the trend that has been developing is still in play. The Brooklyn neighborhoods that are least able to weather an economic downturn are getting hit hardest.
If there is a silver lining at all, this is an excellent time to buy for those who are in a position to do so, said Heskel. We are seeing more people taking advantage of these historical low rates and prices throughout the metropolitan area.
About HMS Associates
HMS Associates is a full-service Brooklyn-based residential and commercial appraisal firm. Founded by Sam Heskel in 1998, the firm serves all of New York City
and its surrounding areas. Heskel, an associate member of The Appraisal Institute, is state certified in New York and New Jersey and is a member of The National Association of REALTORS®.
The firm is FHA-approved, and Heskel is a member of Multiple Listing Services for Brooklyn and Long Island (includes Queens), Putnam and Westchester counties, and the Greater Hudson Valley.
northsloperenter…I still believe my “relative value” argument that I’ve posited for so long is firmly intact. In case you missed it it goes something like this: There are thousands and thousands of Manhattan condo owners that still have very large gains in their condos. It only takes a small fraction of them to opt for the Brooklyn brownstone lifestyle to support prices (relatively speaking) for 1 & 2 family rowhouses in Brooklyn Anyone with a 1 or 2 bedroom condo in Manhattan that they bought before say, 2000, has enormous profits (yes, still) and can easily afford to buy a Brooklyn brownstone and get far more space, lower taxes, no CCs and a nice backyard. The economics are still VERY compelling.
dave-o — I don’t know how you get from A to B with those numbers…. they reported a 65% year-on-year change, and a 34.7% change in a short quarter, which was part of that year.
looking straight down at it, that’s a huge accelleration, not a lessening in the fall-off. of course there’s some seasonality effect in there, which is why they report both numbers, so you’d have to see the whole series to get scientific about it (and then you’d probabably be more scientific than they even were when they collected the data)
but still…that looks really bad to me. I don’t know how you put a positive spin on those numbers…
Morning Assheads! Brownstoner is trying to front run things???
“In a case of premature data ejaculation, appraisal firm HMS Associates has put out its first quarter numbers on the Brooklyn real estate market with the last two weeks of March still unreported. ”
Like we need these Assheads to tell us things are bad!! Here retards suck it down..
A Look at Case-Killa Numbers, by Metro Area (Sorry BHO I can’t help it ; ^ ))
http://blogs.wsj.com/economics/2009/03/31/a-look-at-case-shiller-numbers-by-metro-area-7/
The full report!!
(Warning PDF!)
The What (To be continued)
Someday this war is gonna end…
http://www2.standardandpoors.com/spf/pdf/index/CSHomePrice_Release_022445.pdf
I think prices have a ways to come down too. Yes, its a gradual process. But there’s no reason to believe they’ll come down by 50-70% like many people are projecting (hoping), especially if the rate of decline in volume lessens as it seems to be doing in this data. As volume dries up, prices will strengthen. Economics 101. Brooklyn is still better value than Manhattan for 1 & 2 family rowhouses.
Conspiracy theorists rarely let anything as inconvenient as evidence make them reconsider their bizarre views.
“Why should they come down so much as to be affordable to the working middle-class. I apologize if I sound arrogant about that but why should they? Is there some new entitlement program that I missed???”
There is one reason and one reason only:
The city is running out of rich people looking to buy property.
These data confirm what I have been saying for some time (first volume is the story, then price). I do not believe it is a good time to buy. I am in a position to do so and would like to do so but will continue to wait. I believe prices still have a ways to come down. This isn’t the stock market where there can be a short, sharp correction to a bottom. I think this is going to take a while.
I think we have all stated our respective positions on this subject ad nauseam in other threads.
It’s not about entitlement DIBS, it’s about sustainability.
The bubble is a-bursting. You of all people should understand that.
“Housing prices in Brooklyn have just started coming down they have a long way to go before they become affordable of the working middle-class.”
Why should they come down so much as to be affordable to the working middle-class. I apologize if I sound arrogant about that but why should they? Is there some new entitlement program that I missed???
Let me try to understand this. Prices have gone down 8 percent more or less and there is room for prices to go down alot more and now is the time to buy? Go right ahead but I smell a rat. Housing prices in Brooklyn have just started coming down they have a long way to go before they become affordable of the working middle-class.