Isaac Newtown theorized that what goes up must come down. Williamsburg’s real estate developers are hoping for the opposite.
After a year that was predictable only for its volatility in sales and rental prices, real estate analysts now believe that market rate prices in Williamsburg have stabilized this quarter.
“Things got better slowly, as the year progressed,” said Apartment and Lofts President David Maundrell. “Pricing has come down and it is definitely lower now. Basically it was a moving target last year.”
In Northside Williamsburg, condo prices average between $650 to $750 per square foot, with rentals at about $40 per square foot, which Maundrell indicated is lower than prices from one year ago. Further away from the waterfront, on the east side of the Brooklyn Queens Expressway, prices have averaged between $550 and $650 per square foot for sales, while in East Williamsburg, prices averaged between $500 and $550 per square foot. According to a study listed in Crain’s, in the first quarter of 2009, sales of condos in Williamsburg fell at a 70% annual rate.
“The one thing about Williamsburg is that there is a lot of different types of housing stock and lots of buildings condos that are turning into rentals,” said Maundrell. “It’s a very big place. We categorize it into three or four general markets.”
In Italian Williamsburg, bracketed by Meeker Avenue and Grand Street, rental prices have also dropped. According to Kline Realty’s Annie Santiago, one-bedroom rentals that went for $1,100 are now being occupied by two people who are looking to save money. Three bedrooms in this neighborhood that were priced at $2,600 by mid-year have dropped as low as $2,400 or $2,300.
“Everyone is trying to move in with more than one person and looking for lower rents,” said Santiago. “Three months ago it started dropping. Owners are hoping it will come back up but at this point, renters are still looking for bargains. I would say six months ago that was unheard of.”
Maundrell predicts a quarter that will experience a high number of real estate transactions in Williamsburg, particularly along the waterfront, as long as banks are willing to work with investors.
“The buyer wants everything under the sun and the market is coming down,” said Maundrell. “Funds and major investors seem to be ready to come to the plate to buy up distressed properties, take these properties and get them occupied with a condo roll out or a rental roll out. The bid and the ask are a lot closer for both parties in 2010.”
A number of waterfront condominium buildings remain partially filled and Maundrell predicts that it will take the rest of the year for towers such as The Edge and Northside Piers to fully rent or sell their units. Nevertheless, analysts are optimistic that 2010 will at least be better than 2009 as buyers search for bargains in a neighborhood once described as up-and-coming, which has now simply arrived.
“Buyers can’t walk around and offer $100,000 below an asking price and accept those prices to be accepted,” said Maundrell. “Older buildings, warehouses that are getting renovated, will fetch a higher number than those estimates. In this market people are attracted to that type of product. You might have a better deal in a new construction building.”