Brooklyn and Queens have seen sharp spikes in residential sales activity since last year, along with a growing momentum in the high-end market, according to a quarterly market report released today by Prudential Douglas Elliman.
But Brooklyn appears to be recovering faster than Queens, which has been devastated by high foreclosure rates.
“They’ve both doing better than they were a year ago,” said appraiser Jonathan Miller, the president and CEO of Miller Samuel and the preparer of the report. But “Queens is trailing Brooklyn,” he said.
The number of sales in Brooklyn jumped 56.9 percent to 1,861 sales in the first quarter of 2010, from 1,186 in the same period of 2009, the report shows. In Queens, there were 3,113 sales, 72.8 percent more than the prior-year quarter.
Eric Benaim, CEO of Long Island City-based brokerage Modern Spaces, said he’s noticed a significant uptick in activity in the borough since last year.
“Last year we did a good amount of sales, but this year we’re doing a lot more,” Benaim said, noting that Sunday open houses at the Powerhouse condominium and 10-63 Jackson Avenue are now crowded.
He said the $8,000 homebuyer tax credit, which has had little impact in the pricier Manhattan market, was a clear help in Queens, where the median sales price in the first quarter of 2010 was $345,000, according to Elliman.
Despite this uptick in sales, the median sales price in Queens was still 12.2 percent lower than last year and 1.4 percent lower than the previous quarter, the report indicates. One possible reason is that new condos in Northwest Queens — the area that includes Long Island City — have been hard hit in the credit crisis.
The median sale price for new development in Northwest Queens fell 18.4 percent year-over-year to $542,500.
New development made up 30.7 percent of the sales in Northwest Queens in the first quarter, Miller said, down from 46.9 percent a year ago, due in part to the continued difficulty of getting mortgages in new condos.
“Financing is not as readily available as it is on a resale,” Miller said.
Another factor likely hindering the growth of Queens prices is a preponderance of foreclosures, which drag down the prices of the homes around them. Since the beginning of the downturn, Queens has seen most of the city’s foreclosures (though Brooklyn has recently started to catch up), with neighborhoods like Jamaica, Richmond Hill and Queens Village especially hard hit, Benaim said.
Queens residents have also fallen victim to a large amount of mortgage fraud. A recent report from First American CoreLogic reported that South Jamaica, Queens, had the highest concentration of fraudulent mortgages in the nation.
In contrast to Queens, Brooklyn prices showed signs of stabilization. The median sale price of a Brooklyn home in the first quarter was $466,000, down just 1.8 percent from the same period of 2009 and up 4.2 percent from the previous quarter. That’s a clear improvement from the fourth quarter of 2009, when the median price was down 8.7 percent from same period of the previous year.
“What we’re seeing is a higher level of sales activity and stabilizing prices,” Miller said.
One reason for Brooklyn’s relatively strong performance is activity in Northwest Brooklyn neighborhoods like Park Slope and Brooklyn Heights, often collectively described as brownstone Brooklyn, said Michael Guerra, an executive vice president at Elliman and director of sales for Brooklyn.
“Brownstone Brooklyn performed well in the first quarter of the year,” he said. “That’s where the good news comes from. If you filter that out, Brooklyn and Queens are very similar.”
There were 69 sales of one- to three-family homes in Northwest Brooklyn, the report found, up 115.6 percent from 32 in the prior-year quarter. The median sales price of these homes increased 14.9 percent to $1.25 million from the first quarter of 2009.
In both Brooklyn and Queens, there is improved activity in the high-end market, which was hit especially hard at the beginning of the downturn.
In the first quarter, “there was more activity north of $1 million than we have seen in the last several quarters,” Miller said.
Owners of many of high-end homes have now reduced their prices to levels more in line with sellers’ expectations, Guerra said.
While the number of brownstone sales is still down from 2008, “we’ve seen our high-end market beginning to move better than it had been,” he said. “It’s priced at levels where people will actually buy it.”