The Brooklyn real-estate bust continues

The Brooklyn Paper
Share on TwitterTweet
Share on Facebook

Don’t miss our updates:

Brooklyn is for sale — but nobody is buying.

The collapsing economy is being blamed for a 35-percent drop in the number of properties sold in the borough’s once-booming housing market in the first quarter of this year compared to the last part of 2008.

Worse, the first quarter of 2009 is off 57 percent compared to the first quarter of 2008.

The bad news — contained in a new report from the real-estate consulting firm Miller Samuel, which conducted the study for the Prudential Douglas Elliman real-estate firm — follows a trend that started last year, when the economy imploded, mostly because of a housing market bust.

The new report shows that sales plunged in all property types and extended from neighborhoods like Williamsburg and Greenpoint (which reported a 40.8-percent decline in sales compared to the previous quarter), the Brownstone Belt (where the number of sales plunged 46.7 percent compared to the previous quarter), and Bay Ridge (which logged a 32.3-percent fall in sales compared to the previous quarter).

The drop in sales was caused in part by unrealistic asking prices, according to researchers.

“Sellers are significantly behind the market,” said Jonathan Miller, president of Miller Samuel. “They are looking at the last high water mark in their building or in their neighborhood and pricing at that point, but the market has changed quite a bit over the past year or year and a half and there is a real disconnect.”

Broker Allen Barcelon who specializes in Boerum Hill — a neighborhood where the number of sales dropped by 56.3 percent compared to the previous quarter — agreed that the price tags are a big part of the problem.

“People are pricing them wrong — there has to be a drastic reduction in asking prices,” said Barcelon, who urged sellers to ask for 15 percent less than estimated pre-crash property values (though, obviously, few are eager to do that). “And you better clean it, paint it, and make it look beautiful if you want it to sell.”

The drop in the number of sales was coupled with declines in sales prices compared to the previous quarter, with plunges of 20.2 percent in brownstones and 11.5 percent in North Brooklyn condos — two markets that insiders predicted would weather the storm.

The borough’s real-estate experts weren’t afraid to pin some of the blame on the contracting credit market.

“The problem is that the mortgage environment is so brutal right now,” said broker Chris Havens. “The banks lent too much, now they are lending too little.”

Looser lending might not bring the housing market back to its peak, but it could result in more closures, according to Havens.

“There are definitely more customers than sales — and there is certainly a lot of product out there,” he noted.

Unfortunately for sellers, the market’s recovery might remain a long way off.

Researchers did observe an increase in sales towards the end of the quarter, but they tempered any optimism by linking the upswing to the housing market’s traditional spring uptick. Next quarter’s report will show whether this year’s uptick was stronger or weaker than previous years’.

Updated 5:12 pm, July 9, 2018
Today’s news:
Share on TwitterTweet
Share on Facebook

Don’t miss our updates:

Reasonable discourse

Fourth Estate from DUMBO says:
Does your paper still think the Dock St tower is a good idea?

Just because you can build it, doesn't mean they will come.

Perhaps your paper should stand behind David McCullough and his idea of a National Park....that will attract more money into the area than an empty building blocking the Brooklyn Bridge.
April 17, 2009, 11:54 am
Hipp from Park Slope says:
Let the recovery stagnate, I don't feel like moving yet. I'm sure it's even harder to sell a property such as the one I live in, which is locally known as the "worst brownstone in Park Slope."
April 17, 2009, 2:25 pm
teegee from sunset park says:
What the experts fail to observe is that the selling prices cannot come down because the speculators paid too much, invested too much and now have to cover those expenses. Oops, they can't. So the correction will only come in the form of bankruptcy. So hold on folks and wait six more months and then bargains will be found in some of the more coveted neighborhoods. and hipsters who were homesteading in the outer boros will move to manhattan where they wanted to be from the start. but what is to come of all that outer boro construction? what will the impact be?
April 17, 2009, 8:48 pm
Fourth Estate from DUMBO says:
teegee....there will be a lot of empty buildings everywhere. We need responsible development of Brooklyn, not build build build and 'hope' they will come. At least Silverstein understands the reality of the situation and is talking about putting off the freedom tower by decades. There are many people still thinking it is 5 years ago.
April 18, 2009, 6:59 am
Insame from inthemembrane says:
Chris Haven's wants lending to be loosened.

Is he nuts? This is what got us into this in the first place.

Banks ARE lending. They're lending to people that have good credit ratings and a good down payment. This way they get paid back. Makes sense.

The housing prices need to fall. The average price of a house in most areas of brooklyn is 500 to 600k. The average household can aford 220k. There is a major problem here.

No more fake mortgages. Housing prices need to fall by a lot. This is the only cure to the housing market.
April 20, 2009, 4:23 am
martin from Brooklyn says:
The unemployment rate is heading past 10% and people are afraid of losing their jobs...I mean a house is still just four walls
and all the costs associated with it from property taxes (which will go up) to fixing plumbing and heaters and water bills etcetera etcetera. Sorry, asking prices are too high and if anyone believes we are going back to dot-com or pre-market crash prices needs to take a cold shower.All those houses are burdens to those who are laden with debt and the house buyers know it! So as long as home sellers are in da-da
land nothing will move..And who can trust the market now..Will it go up another 1000 points or tank when G.M. declares bankruptcy or another bank reveals a disaster..uncertainty is killing the market.
April 20, 2009, 6:57 am
Roger from Bay Ridge says:
Fourth Estate from DUMBO says: "There are many people still thinking it is 5 years ago."

Like in Bay Ridge, where pipe-dreamers think that any house with indoor plumbing is worth $850k-plus ... and where no one seems to notice (or at least mention) the scads of store closings plus "for rent" signs plus reduced retail foot traffic.
April 20, 2009, 7:27 am
sunnylicious from bushwick says:
Thats because the prices in BK have been too high for a LONG time...just because there are drops of 30-40% does not mean the prices are good.

I swear some of you realtors have NEVER lived in BK...especially in the areas where you are pushing property at these ridiculous prices.
April 20, 2009, 11:57 am
David from One Main Street says:
Fourth Estate, "Dock Street DUMBO" is a rental.
April 20, 2009, 2:11 pm
Fourth Estate from DUMBO says:

Wow, I truly am honored that you took the time to respond to my rant. I'm not sure what you really are referring to as far as rentals go, but the last time I checked, "Dock St DUMBO" was a parking lot.

Hold on....

Well from the vantage of Front St, it still looks like a parking lot. You renting parking spaces? I need a place to park. Sorry I doubted you, affordable parking is what we do need, thank you sir!
April 20, 2009, 4:51 pm
Russian Man from Manhattan Beach says:
Who in Brooklyn can possible afford to buy any kind of real estate at the existing price/income ratio? The prices need to come down another 80% before they become affordable in this crime ridden, crap school neighborhood.
April 20, 2009, 7:22 pm
Dan from Greenpoint says:
The ONLY thing fueling NYC RE prices has been the outrageous bonuses that Wall St corruptsters were giving themselves. With that Magic Money they drove-up RE prices to the STRATOSPHERE.

NOW that prices are barely starting to soften up a little you have the GALL to call this a "Buyers Market"!?!?!

You're funny.
April 20, 2009, 8:10 pm
Bill from Bensonhurst says:
NEWSFLASH: The VAST majority of NY'ers lives off LESS than $55K a year. You do the math.

Don't forget to factor in maintenence fees and property taxes WHICH ARE RISING EVEN AS PROPERTY VALUES DROP. Like the previous poster says, now that Wall St banksters are gone, GOOD LUCK finding SVCKERS willing or even ABLE to pay these CRAZY prices.
April 20, 2009, 8:14 pm
Fourth Estate from DUMBO says:
Perhaps it is time we address greed as an addiction. Let's face it, 'build build build' is not going to solve any problems.
April 26, 2009, 10:47 pm
Brian from Diker says:
With Case Schiller index predicting another 30% to 50% drop from the current pricing. Do you believe that price has to come down to half of the current level to bottom out? The number is unthinkable yet we are at a unprecedented environment.
June 25, 2009, 11:15 pm
Rob Miller from None says:
Jan. 20, 2010, 5:59 am
renyc from Brooklyn says:
We need another crash, which will come by end of year. Can't wait to see panic - "oh know, the $550K 1.5 bedroom I bought in Williams burg is now decreasing in value ...." It can happen, Things don't appreciate in value along a vertical incline in a straight line.

Just wait, gas prices suck, we've extended ourselves further abroad, everyone believes we're paying the highest taxes ever (wrong - we need to raise taxes significantly higher), and we have no clear set of economic development priorities. Baaa ha aha aha ahaah.... Honestly, the fodder for sale in Brooklyn is crap.
April 12, 2011, 4:55 pm
renyc from Brooklyn says:
PS apologies for the typos and don't believe the stuff for sale is crap - go check out Chicago - half the price of what you pay in Brooklyn will get you an incredible west loop/river north loft ... with parking INCLUDED and much more. Wake up NYC, your infrastructure sucks, you're going to need to cut services, there are public sector layoffs happening all over and soon NYC .... Yeah, these prices are good ones.
April 12, 2011, 4:58 pm

Comments closed.

First name
Last name
Your neighborhood
Email address
Daytime phone

Your letter must be signed and include all of the information requested above. (Only your name and neighborhood are published with the letter.) Letters should be as brief as possible; while they may discuss any topic of interest to our readers, priority will be given to letters that relate to stories covered by The Brooklyn Paper.

Letters will be edited at the sole discretion of the editor, may be published in whole or part in any media, and upon publication become the property of The Brooklyn Paper. The earlier in the week you send your letter, the better.

Keep it local!

Stay in touch with your community. Subscribe to our free newsletter: