Why Brooklyn home sales prices rose in bleak third quarter

Median home sales prices in Brooklyn rose 5 percent in the third quarter of 2011, according to Prudential Douglas Elliman’s Brooklyn quarterly survey of sales, as The Real Deal previously reported. BrickUnderground.com has some theories as to why the borough saw price increases in a relatively bleak quarter that saw flat prices in Manhattan.

Aside from the obvious — affordability, driven in some measure at least by condominiums built with tax abatements — the factors behind Brooklyn’s sales numbers, BrickUnderground said, include less-crowded elite schools, vibrant small businesses and, of course, the best views of Manhattan you can get without living in Hoboken.

Further, the difficulty in getting into a co-op in Manhattan — both financially and socially — has many buyers looking to Brooklyn, where both condos and co-ops are not just cheaper but easier to purchase.

“Nowadays co-ops have stricter debt-to-income ratios and require more liquidity after closing,” Jeffrey Nolan, senior associate at the Corcoran Group told Brickunderground. “So while co-ops appear less expensive based on price-per-square foot, they may now require more income and more liquid assets than a condo.”

The third quarter in Brooklyn also showed the number of sales up 18 percent year-over-year — the second highest quarterly total tallied in the last three years. [Brickunderground.com]