Brooklyn and Queens see sales spurt

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From left: the L Haus in Long Island City, the Toren in Downtown Brooklyn

A spurt in sales activity over the summer strengthened the Brooklyn and Queens housing markets, though prices and sales volume are still weaker than last year, according to a third-quarter market report released today by Prudential Douglas Elliman.

“It’s good news taken with a grain of salt,” said Jonathan Miller, the president of appraisal company Miller Samuel and the preparer of the report. “The wild card is going to be if we see an elevated level of activity going forward.”

The number of home sales in Brooklyn leaped 29.3 percent to 1,847 in the third quarter, up from 1,428 in the second quarter. But sales were still down 19.6 percent from 2,298 in the third quarter of 2008. Meanwhile, the median sales price of a co-op, condo or house in the borough increased for the first time in two years, jumping 7.9 percent to $476,000 in the third quarter from $441,090 in the previous quarter. It’s still some 6.7 percent lower than the $510,000 median sales price in the third quarter of last year, however.

Queens showed a similar summertime uptick in activity with 2,789 sales in the third quarter, up 31 percent from the second quarter, but 14 percent below the prior-year quarter. The median sales price in the borough was $362,000, the same as last quarter and 9.5 percent lower than $400,000 in the prior-year quarter.

Much like Manhattan, the surge in activity was likely caused by stock market gains, lower prices and pent-up demand from the post-Lehman deep freeze, Miller said.

“You have this renewed element of affordability that has brought people into the market despite tight credit,” he said.

Still, he cautioned that the elevated level of activity likely won’t continue at the same pace, especially since the New York City area continues to face rising unemployment along with the recession and credit crisis.

“We had such a spurt in activity over the summer, it’s not clear whether we’ll see the same thing going forward,” he said. “The latter part of the year is when the market starts to cool.”

Within Brooklyn and Queens are a crazy quilt of individual markets, each very different.

Among the hardest-hit markets in Brooklyn was the Williamsburg/Greenpoint area, which saw double-digit, year-over-year price decreases, despite a slight improvement this summer. The median sales price in the area — known for being overbuilt with new condos — fell 12.1 percent to $564,110 in the third quarter of 2008, while the average price sank 14.6 percent. The number of sales has climbed 20 percent since the second quarter, but still plummeted 40.8 percent from the third quarter of 2008.

Northwest Brooklyn, which encompasses Downtown Brooklyn and nearby neighborhoods like Park Slope and Carroll Gardens, was also hard-hit, but fared slightly better. The area saw a significant increase in activity in the third quarter with 415 sales, up an impressive 69.4 percent from the second quarter but down 19.6 percent from the prior-year quarter. The median sales price in the third quarter was $565,000 in the area, down 14.2 percent from the prior-year quarter, while the average price fell 5.1 percent year-over-year.

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The sales surge has spurred hope that the good times are returning. Joseph Ferrara, a partner at BFC Partners, the developer of Toren in Downtown Brooklyn, said he’s sold two units at the development at the full asking price in the past 10 days.

“We’ve hit as low as we can go in Downtown Brooklyn, and it’s on the upside,” Ferrara said. “The market is going to get stronger and stronger.”

Still, he said, “getting better is all relative,” noting that he frequently gets offers in the range of $450,000 for a $600,000 apartment.

Nearby, Oro recently chopped prices across the board by up to 25 percent, and the developers of One Brooklyn Bridge Park in Brooklyn Heights are hoping to spur sales by offering a free Audi to buyers of apartments over $2 million.

One area of relative strength for Queens was Long Island City, said Miller.

“There was a lot of new development contract activity [in Long Island City] this summer, perhaps more than any other area,” he said. “I’m not saying they were off to the races, but there was a noticeable difference compared to other areas.”

However, because new development sales often takes months or years to close, that improvement hasn’t yet been reflected in the numbers, he said.

In Northwest Queens, the median price of a new development condo in the third quarter was $610,950, 11.1 percent more than the second quarter and 4.3 percent less than the prior-year quarter. There were 205 sales in the area in the third quarter, 26.5 percent more than the previous quarter and 23.5 percent less than last year.

Median prices for new developments in Queens as a whole fell only 0.5 percent from the same quarter of last year, compared to 10.1 percent for resales. By contrast, median new development prices for Brooklyn fell 6.4 percent.

Andrew Gerringer, managing director of the Prudential Douglas Elliman Development Marketing Group, said three of his Long Island City projects — Arris Lofts, the Foundry at Hunters Point and the Powerhouse — are at least 50 percent sold, which helps buyers there surmount stiff presale requirements for mortgages. A newer project, the L Haus, is about 20 percent sold.

Long Island City is “not an overbuilt area like Williamsburg or Downtown Brooklyn,” Gerringer said.

He added that the market has gained unexpected strength from young, Asian buyers who now live in Flushing and other parts of Queens, especially in the Jackson Square area, which is only one stop on the No. 7 train from Flushing. “It’s a new fuel for the fire,” he said.

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