Brooklyn new development sales slide in Q1, but overall market less “fragile”

Home prices and transaction volume in Brooklyn and Queens were down in the first quarter of 2012 compared to the same period last year, according to market reports released today by residential brokerages Prudential Douglas Elliman and the Corcoran Group, although the overall picture shows stability.

In Brooklyn, the median sales price dropped 5.3 percent to $450,000 from $475,000 in the same period last year, while the number of sales tumbled 23.9 percent to 1,807 from 2,373 sales, the Elliman report says. Corcoran pegged the median sales price at $428,000, a 2 percent decline over the same period last year.

However, observers remained positive about the Brooklyn housing market in the face of a slump in sales and prices.

After several “fragile” quarters, said Michael Guerra, Elliman’s Brooklyn managing director, “what we’ve emerged into is very solid stability because we have health at both the high and low end.”

While sales volume may be down compared to last year, the first quarter of 2011 showed an unusually high number of closings, as buyers returned to the market following a drop-off in demand caused by the expiration of the federal first-time homebuyer tax credit in mid-2010, said Jonathan Miller, president of appraisal firm Miller Samuel and the author of Elliman’s report.

“Yes, sales are below the same period last year, but sales aren’t declining,” he said. “It’s just that we had this one period that stood out.”

Meanwhile, transactions involving less expensive properties — such as co-ops and entry-level homes — took up a bigger share of the Brooklyn market last quarter, skewing prices downward, Miller said. This mimicked a trend established in the fourth quarter of 2011.

For example, sales of condos, which are generally pricier, fell 41.2 percent year-over-year, to 543 units from 923 units, while co-op sales dropped a more modest 21 percent, to 368 units from 466 units, the Elliman report says.

The median sales price of a co-op in the first quarter was $275,000, down 6.8 percent from the same period last year, while the median sales price of a condo came in at $478,000, down 8.1 percent, according to the Elliman report.

Additionally, listing inventory dropped sharply, falling 16.7 percent to a below-average 6,092 units from 7,316 units at the same time last year, the report says.

If one dark spot exists in the Brooklyn market, it is in new development, which made up a relatively typical 15.2 percent of the market. Sales of newly constructed condos slid 44.1 percent year-over-year, to 275 sales from 492, according to the Elliman report, while the median sales price declined 3.4 percent to $501,930 from $519,654.

However, Corcoran found that new development accounted for 28 percent of sales, its lowest level in three years. “While demand for new housing remains strong,” Frank Percesepe, Corcoran’s Brooklyn senior regional vice president, wrote in the firm’s report, “sales volume and price growth remain subdued.”

Also evident was a jump in townhouse prices because of two record-breaking deals in Brooklyn Heights — 212 Columbia, which sold for $11 million and 70 Willow Street, the one-time haunt of Truman Capote, which sold for $12.5 million.

Those sales pushed the median price for single-family townhouses up 37 percent in first-quarter 2012, to $1.285 million from $935,000 in first-quarter 2011, the Corcoran report shows.

Overall, Queens followed a similar trajectory as Brooklyn. In the first quarter of 2012, sales decreased 16.2 percent, to 2,176 from 2,598, compared to the same time last year, the Elliman report says. But the drop in inventory outpaced the drop in sales, falling 35 percent to 8,851 units from 13,609 units at the same point last year.

Prices dipped slightly, dragged down by the high share of entry-level apartments trading hands in light of historically low mortgage rates: the median sales price dropped 1.1 percent to $346,275 from $350,000 in the prior year quarter.

Nevertheless, that’s an improvement from past quarters, Miller said, when the Queens housing market was “hanging on by its fingernails trying to stabilize.”