Outer borough condo prices increased year-over-year in the fourth quarter of 2011 amid a citywide slump in home sales.
Average condo sale prices in Brooklyn and Queens rose by 11 and six percent, reaching $596,000 and $450,000, respectively, according to the latest data from the Real Estate Board of New York.
Limited availability of housing in trendy neighborhoods drove especially deep sales declines in the outer boroughs, as new, upscale complexes that take up a significant share of the market sold quickly, bumping prices up.
Williamsburg led Brooklyn with a 25 percent increase in year-over-year fourth quarter average pricing, followed by Windsor Terrace, which saw a 24 percent spike; in Queens, Flushing led the way with a 30 percent gain, followed by Rego Park/Forest Hills/Kew Gardens, which rose 20 percent.
“Any time you’re going for an elite luxury building with amenities, they’re just going to command a bigger premium,” said Eugene Litvak, a vice president and associate broker with City Habitats who moved into a one-bedroom at Edge one year ago after noticing its units were flying off the racks.
The 565-unit complex in Williamsburg features waterfront condos that max out around $1.3 million.
“Let’s jump ship before we’re too late,” Litvak remembers thinking as he and his wife scrambled to find a new home. “There were five different options of apartments we wanted to buy, but they were all sold already within a couple of weeks. It just shows you how fast the value properties are moving.”
Units at the Edge, which boasts an amenity package featuring a pool, steam room, basketball court, golf simulator, two gyms and a roof-deck, among others, have been selling off as many as 35 units per month, said Highlyann Krasnow, a partner at MNS Realty who oversees sales at the Edge.
“Our absorption is absolutely insane right now,” she said. “That’s a large chunk of the inventory in Williamsburg.”
Manhattan year-over-year condo prices fell 11 percent, for a total citywide average decline of 4 percent.
Year-over-year average Manhattan home prices (includes condo, co-op, 1-3 family) were also down 11 percent, while Brooklyn and Queens broke even – thanks in large part to the strong condo figures.
Year-over-year condo sales numbers declined in the fourth quarter by 16 percent in Manhattan; 26 percent in the Bronx; 28 percent in Brooklyn; 23 percent in Queens; and 27 percent in Staten Island, for an average citywide decline of 21 percent.
“The demand is there, the ability to satisfy that demand from a financial point of view or an economic point of view is not,” said Michael Slattery, a senior vice president at REBNY.
“It’s not that people think the prices are unfair or that it’s not a good time to buy, it’s more that they’re just uncertain about the economy and perhaps struggling to get a mortgage.”
The statistical decline in Manhattan prices was due in large part to the absence of new, upscale inventory, which is less likely to be available in posh areas like Central Park West, Slattery said.
“If you get a 100-unit building and you’re closing ten sales in a quarter, there are a lot of higher valued sales occurring and I think that helps to drive the market upwards,” he said. “When you lose a project like that tends to be a bit of a settling effect in the pricing.”
The nation saw the unemployment rate dip 0.6 percentage points (down to 8.5 percent) from August to December, as the conference board’s consumer confidence index jumped from 55.2 in November to 64.5 in December.
But despite the positive end to the year, the housing terrain remains treacherous for some hopeful home buyers.
“The recession really isn’t over for a lot of people and so that uncertainty about the economy, less so than the price of property, is making it a little harder,” Slattery said, adding that stringent financing contributed to the especially steep sales declines in the boroughs.
“In Manhattan you may see all cash transactions or very little finance transactions – especially on the Upper East Side and the Upper West Side – but in the boroughs I think it’s really a market that demands and requires financing and that’s gotten harder.”