By Gabriele Sewtz
The Q4 2008 Brooklyn real estate market report shows that buyer confidence was highly impacted by the turmoil of the financial crisis and the fear of a recession. Overall, the number of sales was down by 42.7% in Brooklyn in the last quarter in comparison to the same period a year ago. In Northwest Brooklyn which among others is comprised of the neighborhoods Park Slope and Prospect Heights, the average sales price increased by 1.4% in Q4 08 in comparison to Q4 07 but the median sales price decreased by 8.9%. The mixed price trends can mainly be explained by the strong performance of the Brownstone market in the last quarter.
In the first quarter of 2009 many buyers are taking advantage of the low interest rates and the softening of the market - looking for deals and making low ball offers. A low ball offer is an offer that is 10% or more under asking price. An offer has a better chance of being accepted or countered if the buyer is otherwise qualified. An all cash deal is favorable over a financing contingency because of faster closing times and the lack of a financing risk. Hence a seller might give a larger discount to an all cash buyer. But especially co -op sellers should be aware that quite often the cash is not entirely owned by the applicant or that other financial criteria like credit and qualifying income of the applicant might not meet a co-op’s requirements. This means a cash deal is not always better these days.
Whether a seller is ready to make a deal and accept a low ball offer depends on the individual situation but in general condo and townhouse owners feel that they are better off renting out their properties if the offers do not meet their expectations. While subletting an apartment in a co-op is certainly more challenging, many boards are adjusting their strict subletting policies to help sellers out in the current market and to ensure that the value of the apartments in the building is protected. To sum it up: An offer is an offer but not more and not less and it can be long way these days to get from an offer to a signed contract and the actual closing.
If you have questions or would like to receive a complimentary copy of the Q4 08 Brooklyn market report please do not hesitate to contact 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.
