Brooklyn, New York, Home Prices Drop as Luxury Properties Hit

rooklyn, New York, Home Prices Drop as Luxury Properties Hit 2009-10-15 04:01:00.11 GMT By Oshrat Carmiel Oct. 15 (Bloomberg) -- Brooklyn, New York, home prices fell in the third quarter from a year earlier as buyers sought discounts and shunned luxury purchases amid rising unemployment. The median price dropped 6.7 percent to $476,000, the eighth quarterly year-over-year decline in a row,... [more]

rooklyn, New York, Home Prices Drop as Luxury Properties Hit 2009-10-15 04:01:00.11 GMT By Oshrat Carmiel Oct. 15 (Bloomberg) -- Brooklyn, New York, home prices fell in the third quarter from a year earlier as buyers sought discounts and shunned luxury purchases amid rising unemployment. The median price dropped 6.7 percent to $476,000, the eighth quarterly year-over-year decline in a row, appraiser Miller Samuel Inc. and broker Prudential Douglas Elliman Real Estate said today. Luxury prices declined almost 14 percent to a median of $1.04 million. “It’s spread across all property,” Miller Samuel President Jonathan Miller said in an interview. “Lenders continue to maintain a harsh underwriting standard.” Manhattan and Brooklyn both followed the U.S. property market into decline as Wall Street slashed jobs and consumers cut spending. Nationwide, existing home prices peaked in July 2006 and new home prices topped out in March 2007. In Manhattan, the first decline for both condominiums and co-operative apartments hit this year. Discount seekers in Brooklyn flooded the market in the three months ending Sept. 30, pushing sales up 29 percent from the second quarter, according to Miller’s report. That’s the biggest quarterly gain in company records dating to January 2003. “That just shows you how low sales activity was in the first half of the year,” Miller said. “Since you’re coming from such a low threshold it’s hard not to set a record.” Sales in the quarter declined almost 20 percent from the same period a year ago. Unemployment Effect New York City has lost 40,300 jobs in the financial industry as the city’s unemployment rate climbed to 10.3 percent in August. The number of job seekers was 415,800, the most since 1976, when the state Labor Department began keeping records using its current data collection methods. Property transactions are also falling as banks restrict lending, Miller said. Brooklyn’s 1,847 sales in the third quarter marked a 62 percent decline from the borough’s peak in the third quarter of 2007. “You really still have a credit problem,” Dottie Herman, president of Prudential Douglas Elliman, said in an interview. “It’s very common that you can go to contract, get a commitment from the bank and then, two weeks before closing, they’re asking for 50 million other things.” It took an average of 165 days to sell a Brooklyn property last quarter, 32 days longer than the same time a year earlier. Discounts off the asking price averaged 5.6 percent compared with 3.2 percent a year earlier. Condos vs. Co-Ops Condominium prices fell 1.7 percent in the quarter to a median of $496,860. Co-operative apartments climbed 1.1 percent to a median of $283,210. The sales price for condominiums in new developments fell 6.4 percent to a median of $514,848. Prices for one- to three-family homes in northwest Brooklyn, including neighborhoods such as Park Slope and Carroll Gardens, declined 14 percent to a median of $1.13 million. One- family houses in the area declined 38 percent to a median of $910,000 and three-family units fell 19 percent to $1.05 million. Two-family houses rose by less than one percent to a median of $1.23 million. [less]