By Charles Hack
Brooklyn’s red hot real estate market continued to sizzle over the last year, and despite signs that sales may be cooling some, real estate agents remain optimistic for buyers and sellers. Average prices for condominiums and co-ops in Downtown Brooklyn and the environs rose, on average, 18 percent over a one-year period, and by 90 percent in at least one market, according to the Corcoran Group year-end report for 2005. Corcoran collected their data from offices in Brooklyn Heights, Cobble Hill, Carroll Gardens, Boerum Hill and Park Slope. But price hikes are not confined to the brownstone neighborhoods, according to John Reinhardt, president and chief executive officer of Fillmore Real Estate. “Brooklyn was hot last year all around,” said Reinhardt. Asking prices across Brooklyn rose, on average, from $455,718 in 2004 to $520,984 in 2005, according Rich Schulhoff of the Brooklyn Board of Realtors. That represents an increase of 14.3 percent for one- to three-bedroom homes. Schulhoff analyzed data from 1,600 properties on the Multiple Listing Service, a catalog of properties available through a pool of agents. Prices rose substantially higher than the average in some neighborhoods— for example, by more than a third in Mill Basin. Some neighborhoods with the steepest increases include Kensington, Fort Greene, Williamsburg and Red Hook, Reinhardt said. These areas have seen a 100 percent increase over the last four years. According to the Multiple Listing Service data, other areas that have seen significant increases include Bay Ridge, with a 16 percent increase, and Sheepshead Bay, with 21 percent. “Sheepshead Bay went up a tremendous amount,” Reinhardt said. Data supplied by the Corcoran Group Brooklyn, which has its head office in Manhattan but offices throughout brownstone Brooklyn, showed that residential sales for 2005 saw even more stunning increases in some markets they serve. Prices for two- to four-family townhouses in Brooklyn Heights increased by 67 percent, to an average of $3.7 million, according to the survey. Average prices in Park Slope for single-family homes surged 90 percent to $3.35 million. According to Corcoran, this was due to an “extremely tight” one-family townhouse market. In Fort Greene and Clinton Hill average prices for condominiums rose by 42 percent. “The driving engine in the fourth quarter 2005 was the sale of luxury condominiums,” according to Corcoran’s chief executive officer and president Pamela Liebman. Corcoran’s data shows the average costs of co-ops and condominiums in Downtown Brooklyn rose by 18 percent from $473,000 to $559,000. Two- to four-family homes increased by 28 percent to $1.3 million. Single-family homes, already at $1.3 million on average, rose just 10 percent to $1.4 million. But like Manhattan, the last three months of 2005 saw the market slow down to a “crawl” in December, according to Reinhardt. As sales slowed, prices softened in some areas, particularly in the higher end of the market. In Mill Basin, Bergen Beach, Bay Ridge and Manhattan Beach, Reinhardt said prices may have dropped as much as 10 percent for some properties over the last quarter. Reinhardt said that the prices had become a “little inflated,” partly because of low interest rates but also because of “media hype” of a real estate bubble. Schulhoff said he does not see any overall fall in prices, but price increases may slow to single digits as part of a cyclical adjustment. “There may be a gradual trend and slowing down in percentage of increases. I don’t see more double-digit increases. You simply can’t sustain that kind of price gain,” Schulhoff said. “You are going to see a leveling of the market and that will be both good for buyers and sellers.” Reinhardt also predicted that sales may pick up if the economy continues to strengthen and investment in new building continues. With interest rates likely to stabilize and a slowing of the market, inventory will build up, offering some downward pressure on prices, said Reinhardt. “January should be stronger,” Reinhardt said. “Buyers are going to start coming out of the woodwork and going back into the market.” Bob Tracey, the president of Tracey Real Estate, which has two offices in southern Brooklyn, sees no end in sight to the real estate boom, despite new building. He said larger inventories provide buyers with more choice, but it would be a mistake for buyers to wait for prices to drop. “It’s always the right time to look for real estate,” said Tracey. “Now is the right time because buyers can be more selective. Increased inventory gives you the best chance of getting a better home.” And Tracey has some advice for anyone who is hoping to hold out for lower prices. “Real estate is as high as it has ever been, but lower than it will ever be,” he said.
