By Gabriele Sewtz
The real estate market is a highly seasonal market. Spring and fall are typically the stronger seasons driven by higher demand and increased inventory on the market. The seasonal pattern can be traced back to the facts that most buyers - and sellers - are reluctant to move over the Holidays during winter time and the beach is just more tempting during the summer than going apartment hunting with temperatures past 90 degrees.
Back to school is around the corner and the fall season will be in full swing soon. With the real estate market in turmoil in the rest of the country, Brooklyn buyers and sellers are expected to be a bit more cautious in their decision making process than in the past. Almost every day I am being asked how is the market. My answer: It is very opportunistic. And apart from my own 2008 track record, actual market and transaction data for the last months confirms this as well.
The second quarter of 2008 was mainly characterized by a decline in the total number of sales in Brooklyn in comparison to the same period a year ago with the number of sales dropping by 43.6% from 3,601 to 2,031 while average sales prices were up by 2.4%. The lower transactional volume can mostly be attributed to the return of higher mortgage underwriting standards. Buyers are facing higher down payment requirements, have to have higher credit scores and face tighter debt to income ratios when obtaining financing.
However, the Northwestern Brooklyn market, comprised of the stronghold neighborhoods Brooklyn Heights, Park Slope, Prospect Heights, Cobble Hill and Carroll Gardens among other neighborhoods, saw an increase in average sales prices of 7.6% from $762,987 (Q2 07) to $820,693 (Q2 08) and a less steep decline of total sales (34.1%) than overall Brooklyn. This once again underscored the continued demand for properties in highly sought after locations and even led to bidding wars for competitively priced properties in the second quarter of 2008.
Average sales prices for co-ops Brooklyn-wide were down by 1.3% in Q2 08 vs. Q2 07 while average condo prices were up by 8.6% but only up by 4.9% when compared to the first quarter of the year. The Brownstone market saw overall a 4% increase in average sales price from $1,290,552 (Q2 07) to $1,342,056 (Q2 08). However, one family homes were up by 15.6% in this quarter in comparison to the previous quarter and balanced out the steep decline of 2 family homes that were down by 21.1% in Q2 08 in comparison to Q1 08.
To sum it up: Prime location, prime condition in a neighborhood like Park Slope still faces strong demand if priced right. And qualified buyers will find that sellers are more amenable to negotiate than they have been in the past and good opportunities can be found.
Source: To obtain a complete copy of the Prudential Douglas Elliman Brooklyn Market Report Q2 2008, please email me at gsewtz@elliman.com
A mother, Real Estate Broker and active Park Slope community member who moved to Brooklyn from Hamburg, Germany with her husband in 1999, Gabriele understands the major emotional undertaking and financial decisions involved in relocating, purchasing and forming roots in a neighborhood, and strives to ease the real estate process for others. Aside from her professional expertise, Gabriele is also a seasoned real estate investor and landlord who owns apartments in Park Slope and Prospect Heights. Gabriele holds an M.B.A. from the University of Hamburg. She is also a regular contributor for Hip Slope Mama on Real Estate related topics.
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