Throughout most of Brooklyn, the housing market has rebounded from the slump that followed the economic collapse of 2008. While the number of new properties being sold in America is currently the lowest in recorded history, Brooklyn has seen an increase in total sales and sales prices in the past year. But the health of the housing market depends on that familiar variable: location, location, location. While western and southern Brooklyn have seen a steady increase in sales and prices, some neighborhoods east of Flatbush Avenue, such as Crown Heights, Bedford-Stuyvesant and East New York, are still mired in the mess of foreclosures that have swept America over the past two years.
The party only lasted for a year, and by 2002, the prices in Williamsburg were on par with the rest of Brooklyn.
Since then, the market has climbed steadily, although not particularly steeply.
For the last 8 years, the median sales price in both Williamsburg and Greenpoint have been significantly lower than the Brooklyn average, but the price per square foot has been much higher, indicating a market for smaller apartments.
The kind of properties dominating the market in Williamsburg and Greenpoint —new, and relatively luxurious— have been hit hard by the recession nationally but numbers indicate that these neighborhoods have made a relatively speedy recovery.
Dave Behin, who works as a consultant for The Developer’s Group, a company offering consulting and brokering services to developers, says that in the eight or nine months following the failure of Lehman Brothers the market slowed down, but that by 2009 it was already recovering. “We are not yet at the price points of 2007, but people recognize a good deal,” Behin says.
The Developer’s Group is behind massive, up-scale developments all over Brooklyn, such as The Edge in Williamsburg and 315 Gates in Clinton Hill. Behin said some customers offer him significantly less than asking price for a new condo, but that these customers misunderstand the housing market and believe that the situation in New York is similar to that in Arizona and Nevada. But it’s not.
“In 2003 the market was very strong. We could sell incomplete buildings based on drawings. The sellers couldn’t keep up with the buyers. Now we have to work harder to sell,” Behin says. “But if the developer has built a good project and the price is right, it will sell.”
Crown Heights/Bedford-Stuyvesant/East New York: A whiff of panic
While the housing market on the west side of Flatbush Avenue appears stable or on the rebound, east of the avenue it’s “bordering on depression,” according to Michael Corley, a real estate broker and resident of Crown Heights. “We’re seeing broadly that there is no demand consuming the amount of inventory coming on board,” Corley said. “People are still very skittish.”
The median home sales price decreased 16.8 percent in Bedford-Stuyvesant and 14.1 percent in East New York, respectively, compared to a year ago, while the number of sales rose in both neighborhoods. While both home prices and the numbers of sales in Crown Heights are up since last year, Corley said most of the buyers in central Brooklyn are investors or developers, not families. There are more short sales than regular sales taking place in central Brooklyn, which shows that homeowners continue to default on their mortgages. Residents are desperate and choose to short sell as an alternative to foreclosing. Meanwhile, the sharp drop in home values that began in Jan. 2008 continues in this area of Brooklyn. Home values dropped by about 19 percent in Crown Heights and 12 percent in Bedford-Stuyvesant, respectively.
Corley also said central Brooklyn east of Flatbush Avenue will see more foreclosures in 2011. Real estate search engine Trulia shows there are 654 homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process in Bedford-Stuyvesant, and 381 in East New York, respectively.
Dumbo/Downtown Brooklyn: Little neighborhoods, big prices
The Dumbo and Downtown Brooklyn neighborhoods have remained stable through the recession. Like other neighborhoods, sales are up but prices are down. According to Trulia.com, at the end of October the average listing price for Dumbo and Downtown Brooklyn was $593,959, while the median sales price this fall was $548,056. Last year the median sales price was $747,975 and five years ago it was $476,580. This shows that prices boomed and then fell in 2009, but then leveled out higher than 2005’s average.
As for sales, both areas were recently rezoned for residency, which has put these once commercial neighborhoods at the forefront of Brooklyn real estate.
Asher Abehsera, executive vice president of residential properties for Two Trees, describes Dumbo as a small, charming enclave. He thinks that the market in Dumbo is ruled by supply and demand. “It’s a couple of buildings tucked in between two bridges and there hasn’t been a new condo built since 2006 or 2007,” he said. So most of the real estate activity that happens in Dumbo is due to resales in which everyone buys from the developer and the market remains stable.
In Downtown Brooklyn Abehsera said that the neighborhood’s value changes block by block. The Two Trees building at Court and Atlantic has no vacancies and a wait list, while near Flatbush Avenue, there is lots of construction and the area is still getting established for residences. Abehsera cites the area’s lack of grocery stores and neighborhood amenities.
Bay Ridge/Dyker Heights: Steady as she goes
Bay Ridge and Dyker Heights, unlike most of the borough, were only marginally affected by the recession. Home values in each area have actually increased from Aug. 2009 to Aug. 2010, according to Zillow.com. Bay Ridge’s average home values have gone up 7.8 percent, to $648,000, and Dyker Heights’ average values have increased 9.8 percent, to $610,000.
In August 2010, the median sales prices for Bay Ridge and Dyker Heights were $645,000 and $566,000, respectively.
Real estate agents said the housing market is generally steady, and that families who can’t afford housing in a neighborhood like Park Slope often choose to settle in Bay Ridge instead.
Frank DeSantis of New Spirit Realty said Bay Ridge is unique because of its location. It is only accessible by the “R” train and a handful of bus lines, and it can take residents almost an hour to travel to Manhattan. As a result, the area has become very family-oriented and communal.
“Bay Ridge is a solid community,” DeSantis said. “Some people say the R train, the slowest train in the west, keeps it that way. It’s like a hidden secret.” DeSantis also said rentals have been particularly strong this year.
Cliff Venturini of Ben Ray Real Estate Company in Dyker Heights said his business is up 18 percent this year. He attributed that to an increase in advertising, which he said is crucial for agencies even during tough economic times. “At this office, we’re spending more money than ever on advertising,” he said. “You have to spend money in this business.”
Becky Bratu, Evan MacDonald, Vegas Tenold, and Cambrey Thomas contributed to this report.
Continue reading Part III “Growing Up Ain’t Cheap.”