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Tuesday, December 16, 2008

Brooklyn Real Estate Market: How bad is it really?

Gabriele Sewtz

In the 3rd quarter of 2008 the Brooklyn real estate market showed signs of cooling down after years of record highs. Taking a closer look at actual sales data though reveals that the market did not plunge down as it is quite often the perception fueled by media reports. The median sales price of the Northwest Brooklyn market declined 3.9% in the 3rd quarter of 2008 in comparison to the same period a year before. The financial crisis slowed down transaction volume and resulted in longer processing times when obtaining financing. Below you will find a snapshot of sales data for different property types.

Co-ops 3Q 08 vs. 3Q 07

  • Median sales price of co-ops down by 1.7%
  • Number of days on the market for co-ops was 136 days, 2.3% up

Condos 3Q 08 vs. 3Q 07

  • Median sales price of condos down by 4.5% (incl. new development)
  • Number of days on the market for condos was 159, 3.6% down
  • Townhouses 3Q 08 vs. 3Q 07
  • Median sales price for 1- and 3- Family was up by 7.7% and 15%
  • Median sales price for 2-Family was down 6.1%
  • Number of Brownstone sales decreased by 59.8%
  • Luxury Market (top 10% of all co-op, condo and 1-3 family sales) 3Q 08 vs. 3Q 07
  • Average sales price of luxury market (top 10%) slipped by 3%
  • Listing discount from last list price was 1.7% for luxury market

Buyers started taking advantage of the low interest rates and the softening of the market while sellers started to adjust to the changed market conditions. Will the market go down any further? It will mostly depend on the development of the interest rates and the financial resources of buyers. Rising interest rates and/or further financial losses of potential buyers would put more pressure on the real estate market going forward.

If you have questions please feel free to contact me at gsewtz@elliman.com. I wish you and your family Happy Holidays and all the best in 2009.

Source: Prudential Douglas Elliman 3Q Brooklyn Market Report prepared by Miller Samuel Inc., a New York residential real estate appraisal company

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.