Has the bust gone bust? New report shows signs of life

The Brooklyn Paper
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The Brooklyn real-estate bust is showing signs of bottoming out.

Sales figures in the third quarter of this year across Brownstone Brooklyn showed a 34-percent average increase in the number of properties sold and a 10.5-percent increase in average sales price — an indication that the worst may be over.

“We are springing back,” said Jonathan Miller, who wrote the Oct. 14 market review for the Prudential Douglas Elliman real-estate firm.

Miller’s analysis revealed:

• The number of sales were up 20.2 percent in Williamsburg and Greenpoint, and prices were up 4.7 percent.

• Bay Ridge scored a 25.3-percent increase in sales, with a 7.2-percent price increase.

• And Brownstone Brooklyn — specifically Boerum Hill, Brooklyn Heights, Carroll Gardens, Clinton Hill, Cobble Hill, Downtown, Fort Greene, Gowanus, Red Hook, Park Slope and Prospect Heights — saw a slam dunk with a 69.4-percent increase in the number of sales and a 10.7-percent increase in prices.

And in those areas, prices for brownstone buildings themselves were up nearly 35 percent from the second quarter of the year.

Miller said the third-quarter uptick showed that the real-estate market has begun to pick up, following trends in the larger economy. As a result, “pent-up demand” has been unleashed, getting fence-sitters back into the market.

But the end of the real-estate crisis is still out of reach, thanks to larger, long-term issues like rampant unemployment rate and the credit crunch, which hits Brooklyn particularly hard because housing prices tend to be higher and big mortgages are hard to get right now.

“[The uptick] does not infer the bottom, but we have definitely experienced the worst of the pain,” Miller told The Brooklyn Paper. “We are not out of the woods, but Brooklyn took a breather.”

Some brokers think Miller is too optimistic. Jean Austin’s Brooklyn Bridge Realty, for example, has only closed six condos and one house in the last two months, fewer than half the number of sales before the crash.

“It’s still nowhere near were it was,” she said.

And prices are still lower than the peak. Miller’s review revealed that the third quarter average sale price in The Brooklyn Paper coverage area is $564,801, up 10.5 percent from the previous quarter. But, the price is still down 5.8 percent from $599,761 in the third quarter of 2008.

But the numbers do show that Brooklyn’s real-estate is playing catch-up from last year’s black-hole, 57-percent drop.

Even though the bust is not completely beaten, now is the time to buy because prices will certainly go up over the next three years, said Dottie Herman, CEO of Prudential Douglas Elliman.

“People who didn’t buy are going to be sorry,” Herman said.

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Reader Feedback

joey from clinton hills says:
Prices in Brooklyn still seem unsustainably high (esp. in my neighborhood) where every apt. is still $500K or more, even with all these new units coming on the market. Is there really an endless supply of folks that can afford such high mortgages?
Oct. 16, 2009, 1:58 pm

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