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.
What, you’ve been watching too much TV. There is more demand for US debt than there was before the crisis, which is reflected in the rate that the treasury has to pay on new issues. In other words, it’s worth MORE to investors, because it is even more clear now that it is the safest place to park your money.
There’s over 10Tr of debt and China owns 200Bn of it. 75%of our debt is owned by persons IN the US. If you are so worried that there will be no demand for US debt, why hasn’t its price reflected your fears?
Someone made the point that we control our own currency, so (they meant) we don’t HAVE to default on it. we can print money. obviously that has negative effects, but we can. Incidently, lots of countries have defaulted on debt in their own currency, but they are countries that had a lot of debt in OTHER currencies, which bankrupted them when their own currency devalued. we’re not in that position. take a class in economics before you go calling people idiots.
brooklynguy: Yes, I do. My employer generally seeks to train its lawyers to become true corporate generalists.
Do you think the U.S. Dollar would be so strong if there were systemic risk in its government bonds?
Lechacal – do you really practice in all of those areas? Just curious, because in this age of hyper-specialization I haven’t come across many big firm corporate generalists.
What–what will happen to you when all comes crashing down? How are we all not connected?
I hear that Dave.
As much as I love some of the F train locales, I don’t want to live along that line, either. Did it once for a while when I first moved to NYC and hated being a slave to that god awful train.
“”US defaults”? LOL. Runaway inflation maybe, but a country cannot default on debt repayable in a currency they control.”
Don’t laugh! We are in Strange Days and things that was unthinkable a few years ago is reality now!
“On another note: to some of the people on this blog who seem to want everything to crash and burn to justify their ideological beliefs and buy cheap real estate–this is not a game. Real people are involved! Rich, middle, working, poor–we are all connected.”
No we are not “Connected”! The Assheads are connected to the Mutant Asset Bubble! The Psychology of the MAB is crashing the Knucklehead belief system! There are no more Lithium Crystals to power the Reality Distortion Field.
“agreed the US is not going to default, it’s more likely they would inflate their way out of it. notice that as the world collapses, our borrowing cost actually goes down.”
This quote is from a idiot! When everyone (China, Japan and OPEC) stops buying US Debt we will have to A) Cut benefits B) Default or C) War! Game over…
“Before we had bitter renters we now have bitter sellers.”
Boy alot has change, LMMFAO!
The What
Someday this war is gonna end…
11217 @ 11;47…its the multiple properties that keep me from doing it. No mortgages on them, otherwise I would have. Besides, i see more upside potential in bed Stuy from a lower base. And I don’t want to ever have to take the F train!!! 🙂
Point taken MaplewoodGuy. I’m just generally frustrated with people not looking at the big picture, promoting class warfare etc.