Mayor Who Cares About Schools, Crime,
Economic Growth Will Keep Prices High
By Sarah Ryley
Brooklyn Daily Eagle
BROOKLYN — Apartments had the greatest percentage increase in average sales price of any property type in Brooklyn, according to a report released Thursday. The numbers indicate that the market continues to remain strong here despite the national trend, and is significantly uplifted by the high-rise development happening in the wealthier parts of the borough.
The average sales price for Brooklyn apartments, including condominiums and cooperatives, increased 14 percent over the past year — the highest percentage increase in all five boroughs — to $494,000, according to a report released by ResidentialNYC.com, a subsidiary of The Real Estate Board of New York (REBNY). Citywide, the average increase was 11 percent to $779,000, with Manhattan having the highest average sales price at $1.2 million.
“The new development there is pushing up the prices,” said REBNY senior vice president Michael Slattery, referring to neighborhoods like Downtown Brooklyn, Fort Greene, Williamsburg and DUMBO that have seen tremendous residential growth in recent years, almost exclusively in the form of high-rise towers.
“Some of the activity in Downtown Brooklyn and brownstone Brooklyn, where there’s a lot of [sales] activity going on, those sales may affect the overall market,” said Slattery. “Those products are coming out at higher-than-average prices, but that’s the nature of that market.”
Single and one- to three-family homes saw a more modest but stable increase of 5 percent and 8 percent, respectively. Figures were based on city records and include all sales in the city, said Slattery. REBNY doesn’t report neighborhood-specific figures, but may start sometime this year, he said.
Slattery said he doesn’t think other neighborhoods more in tune with the national mortgage crisis — Bedford-Stuyvesant and Crown Heights having the highest rate of subprime foreclosures — have substantially impacted sales prices.
“Despite the bad news that seems to appear in the media, I think that sellers, to the extent that they can, are holding out for the prices that they think their property is worth.”
He said recent actions by the Feds, including lowering interest rates and refinancing agreements, could help mitigate the effect foreclosures can have on average sales prices.
Appraisals are based on recent sales in an area and take into account “distress sales,” or homes sold at a lower price to beat foreclosure proceedings.
Despite whatever is happening in the rest of the country, as long as there’s demand to live here, sales prices will continue to remain stable or increase, said Slattery.
City Planning estimates the city’s population will grow by more than a million people over the next two decades. Brooklyn is building the towers to house them, with roughly 14,000 units in some stage of development just in the Downtown Brooklyn vicinity.
Slattery said he doesn’t think a big increase in the student population is a bad thing either.
Several universities are considering major expansions in Brooklyn, including New York University and City Tech, which has chosen Forest City Ratner Companies as a development partner. “From an industry point of view, it’s great because it’s more demand for housing, and we need to continue to produce housing at all levels,” said Slattery.
College students and recent grads are typically willing to move to neighborhoods perceived as less desirable or safe, eventually raising their stature — Williamsburg the most obvious example. “Eventually there could be no undesirable neighborhoods here,” he added, characteristically optimistic.
From a real estate perspective, Slattery named three things the next mayor needs to be good at in order to sustain population growth, which may sound cliched but have been the downfall of many great American cities. “Public safety is a critical issue, improving the schools and fostering economic growth — hopefully candidates will recognize those as important issues,” he said.
© Brooklyn Daily Eagle 2007
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