Brooklyn’s short homes supply holds down sales, raises prices

Queens is low on inventory, too, but prices hold steady
By Guelda Voien | April 11, 2013 11:45AM

Brooklyn and Queens are both suffering from a squeaky tight inventory of homes, although only Brooklyn is seeing the fallout – plummeting sales and skyrocketing prices, according to market reports released today by leading brokerages.

The plummet in Brooklyn sales coincides with the largest year-over-year inventory decline on record, Douglas Elliman’s first-quarter sales report shows. Queens suffered its biggest supply drop since 2005.

“Last year was like shopping for Christmas on the 24th,” said Frank Percesepe of the Corcoran Group, which also released its quarterly numbers. “Now, there is nothing left on the shelves.”

Percesepe told The Real Deal that prices have taken a major leap, and that all the talk of all-cash buyers, bidding wars and open house mobs is not just broker hype. Especially hard hit, he said, are the more desirable sections of Brooklyn, such as brownstone Brooklyn, Williamsburg and Greenpoint.

In Brooklyn, borough-wide, the median price for apartments and single-family homes rose from $428,000 to $480,000, a 12 percent hike over 2012’s first quarter, according to Corcoran’s numbers. Average price per square foot for closed transactions was up 18 percent, from $565 to $665.

Elliman’s Brooklyn numbers, calculated by real estate appraiser Jonathan Miller, show even more dramatic increases: the median sales price jumped 14.4 percent, from $450,000 to $515,000; sales fell almost by half because of fewer homes on the market, from 6,092 to 1,086.

The Williamsburg/Greenpoint area, Miller said, had the biggest pricing spike – 30.4 percent, from $530,000 to $691,029; he theorized that the increase could be attributed at least in part to the type of inventory, namely luxury condominiums.

Queens saw a spike in sales but not in prices, Miller said. The median price stood at $350,000, up 1.1 percent from $346,275 in 2012’s first quarter; sales rose 9.2 percent, from 2,176 to 2,377.

“I think Brooklyn is a couple years in front of Queens in terms of recovery, and essentially, the drop in inventory isn’t choking off sales yet,” Miller said. “There was still some excess supply in the system.”

The borough’s northeast section has the hottest neighborhoods, where median prices jumped 17.3 percent – from $370,110 to $434,167. The neighborhoods include Flushing, where sales at Sky View Parc have had stops and starts, as well as Whitestone and College Point.

Rockaways sales plummeted 42 percent year-over-year, in the wake of Hurricane Sandy, Miller said.

“The Rockaways saw all the metrics drop sharply,” he said. “It’s a small market, but we had only 42 sales.”