Brooklyn Home Sales Jump 56.9% in Q1, Says New Prudential Douglas Elliman Report

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According to New York-based Prudential Douglas Elliman's latest Q-1 real estate market report for Brooklyn, the number of sales jumped as prices began to stabilize.

Here are the PDE report highlights:

Listing inventory below prior year levels as sales rose

The release of pent-up demand in the second half of 2009 continued into 2010 with the number of sales rising 56.9% to 1,861 sales from 1,186 sales in the prior year quarter. The number of sales in the first quarter was 11.1% below the prior quarter level of 2,093, much improved from the 35.9% quarter over quarter decline in number of sales in the prior year. The average quarter-over-quarter decline over the past 5 years is 5.8%. Listing inventory fell to 5,761, 4.7% below the 6,042 listings during the same period a year ago, but 5.6% higher than the 5,439 listings at the end of the prior quarter. The rise in number of sales and the decline in inventory over the year resulted in a significant improvement in the monthly absorption rate-- the number if months it would take to sell all available listings at the current pace of sales. The absorption rate was 9.3 months, down from 15.3 months in the prior year quarter.

Price indicators began to show stabilization

The modest decline in price indicators in the first quarter as compared to the same period a year ago was consistent across all metrics. Median sales price was $466,000, down 1.8% from $474,600 in the prior year quarter, but up 4.2% from $447,174 in the prior quarter. Average sales price was $532,061, down 1.6% from $540,919 in the prior year quarter, but up 7.5% from $494,721 in the prior quarter. A similar pattern was seen in both re-sale and new development median sales price trends with a modest decline from the prior year quarter and increase since the end of 2009. However, the price trend for new development sales tends to lag the market by 12 to 18 months and is determined by the completion of construction. The market share for new development closings was 16.4% of all closings, up from 12.8% market share in the prior quarter.

Listing discount and days on market dropped sharply

The sharp increase in the number of sales and decline in listing inventory as compared to the same period last year resulted in a pronounced contraction in both the listing discount and days on market metrics. The listing discount--percent difference between the listing price at time of contract and the contract price-- dropped to 3.6% from 8.7% in the prior year quarter and from 6% in the prior quarter. Days on market--the number of days from the last time the listing price was changed, if ever, to the contract date--also posted a large decline, falling to 114 days from 142 days in the prior year quarter and from 163 days in the prior quarter. The uptick in sales and decline in listing inventory provided a distinct advantage to properties that were listed closer to market levels.

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Condo Market - Number of sales up sharply from prior year low

Price indicators showed stabilization

There were 573 sales in the first quarter, 74.7% more than the prior year quarter result of 328, a recent low, but slipped 6.5% from the prior quarter total of 613. Increased activity continued to influence stability in prices. Price per square foot increased 3.9% to $494 from $475 in the same period last year and up 4.7% from the prior quarter. Average sales price was essentially unchanged from the prior year quarter at $529,596 and up 4.5% from $506,953 in the prior quarter. Increased sales activity resulted in a decline in days on market to 122 days from 171 days in the prior year quarter, while listing discount dropped to 4.2% from 7.4% over the same period.

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Co-Op Market - Number of sales up from prior year quarter

Price indicators rose

Median sales price in the first quarter was $272,000, up 13.3% from $239,990 in the same period last year and was up 1.1% from $269,000 in the prior quarter. Average sales price followed the same pattern rising 7.4% to $334,994 in the first quarter from $311,862 in the prior year quarter and increased 5.5% from $317,402 in the prior quarter. There were 409 sales in the first quarter, 62.3% more than the same period a year ago, but 18.2% less than 500 in the prior quarter. The rise in sales activity caused days on market to decline to 120 days from 141 in the prior year quarter and listing discount to drop to 4.3% from 8.5% in the same period last year.

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1-3 Family Market - Number of sales above prior year quarter

Price indicators began to stabilize

Median sales price was $540,000 in the first quarter, down 1.8% from $550,000 in the same period last year, but increased 2.9% from $525,000 in the prior quarter. Price per square foot increased 1.8% to $271 from $266 in the prior year quarter, and up 2.9% from $247 in the prior quarter. Price stability was influenced by the rise in sales activity. There were 879 sales in the first quarter, 45% more than 606 sales in the prior quarter, but off 10.3% from 980 in the prior quarter. Days on market fell to 106 days from 127 days in the prior year quarter, its lowest level in more than 2 years.

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Luxury Market - Price indicators up sharply since end of 2009

Days on market dropped sharply

Luxury properties--the top 10% of all sales--had a bottom threshold of $890,000 in the first quarter and accounted for 26.9% of total sales dollars in the borough. The median sales price was $1,150,000, 6.4% above the prior year quarter result of $1,080,363 and 21.1% above $950,000 in the prior quarter. Average sales price  and price per square foot also jumped 17.9% and 14.8% from the prior quarter. Listing discount was 4.9% in the first quarter, higher than 2.6% in the same period last year, while days on market contracted to 125 days from 172 days over the same period.

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North Market - Price indicators mixed compared to prior year quarter, but down from prior quarter

Number of sales above same period last year

Median sales price was $545,000 in the first quarter, down 4.1% from $568,500 in the prior year quarter and down 10.7% from $610,475 in the prior quarter. Average sales price was $600,262 in the first quarter, 7.3% higher than $559,255 in the same period last year, but 5% below $631,590 in the prior quarter. Price per square foot followed a similar pattern rising 13.2% to $465 from $411 in the prior year quarter, but down 0.4% from $467 in the prior quarter. There were 127 sales in the first quarter, 51.2% more than 84 sales in the same period a year ago and nearly the same as the 128 sales in the prior quarter. North Brooklyn accounted for 6.8% of all Brooklyn sales in the first quarter. Since condo sales represent 84.3% of all North Brooklyn sales, the median price indicator followed a similar pattern when compared to the whole North Brooklyn market. Price per square foot was $554, up 6.7% from $519 in the same period last year.

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South Market - Price indicators began to stabilize

Number of sales increased

There were 974 sales in the first quarter, up 40.1% from 695 sales in the same period last year, but 18.2% fewer than 1,190 sales in the prior quarter. South Brooklyn is the largest region with 52.3% of all Brooklyn sales. Average sales price was $490,227 in the first quarter, 3.6% below $508,718 in the prior year quarter, but 6.3% above $460,976 in the prior quarter. Overall median sales price and median sales price across all property types followed a similar pattern. Median sales price was $440,000 in the first quarter, 1.7% below $447,500 in the same period last year, but 3.7% above $424,100 in the prior quarter. Condos, co-ops and 1-3 family properties for the first quarter were below prior year quarter levels, but above prior quarter levels. 1-3 family properties showed the most improvement over the period with a median sales price of $569,490 in the first quarter, unchanged from the same period last  year and 3.3% higher than $551,150 in the prior quarter.

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East Market - Number of sales rose

Price indicators continued to decline

There were 302 sales in the first quarter, 29.1% more than the same period last year, but 5.9% below the prior quarter. Despite the large increase in sales from the prior year quarter, the East region posted the smallest gains of all regions compared to the same period last year. Median sales price was $354,950, down 10.7% from $397,500 in the prior year quarter and down 6.6% from $380,000 in the prior quarter. Average sales price showed a similar pattern declining 12.4% to $379,072 from $432,662 in the same period last year and down 1.7% from $385,588 in the prior quarter. There was disparity in the condo market as compared to the 1-3 family market as price indicators headed in different directions. The median sales price of East Brooklyn condos were up 19% to $347,450 followed a similar pattern when compared to the whole North Brooklyn market. Price per square foot was $554, up 6.7% from $519 in the same period last year. with a median sales price of $569,490 in the first quarter, unchanged from the same period last year and 3.3% higher than $551,150 in the prior quarter. and represent 24.5% of the market, while 1-3 family properties, which represent 74.8% of the market were down 18.6% to $352,500, both compared to the same period a year ago.

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Northwest Market - Number of sales up sharply

Price indicators below prior year quarter

Although both price indicators fell sharply compared to the same period a year ago, both saw gains compared to the prior quarter. The median sales price was $560,506 in first quarter, 14.8% below $657,500 in the prior year quarter, but 8.1% above $518,636 in the prior quarter. Average sales price was $702,995 in first quarter, 13% below $807,810 in the prior year quarter, but 13.1% above $621,743 in the prior quarter. All quintiles posted double digit declines compared to the same period a year ago, yet all quintiles posted gains as compared to the prior quarter. The quintiles with the largest gains over the prior quarter were the second quintile increasing 12.6% to $439,000 and the fifth quintile increasing 17.9% to 1,300,000.

Number of sales jumped from prior year and stabilized in the new year
There were 458 sales in the first quarter, a 164.7% gain over the 173 sales seen in the same period a year ago and unlike the other regions posted a gain from the prior quarter. The number of sales were up 0.9% from 454 sales in the prior quarter.

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Brownstone Market - Price indicators and number of sales jumped

Number of sales jumped

There were 69 sales in the first quarter, more than double the 32 sales of the prior year quarter and up 11.3% from 62 sales in the prior quarter. The brownstone market represented 3.7% of all Brooklyn sales in the first quarter, up from 2.7% during the same period last year and the highest market share seen in more than two years.

All price indicators were up over prior year quarter

In a small submarket, changes in price indicators tend to be more volatile and this quarter was no exception. However, because of the consistency in the average square footage of typical property that sold during the period--2,687 square foot average in the first quarter of 2010 versus 2,698 square foot average in the prior year quarter--the rise in price indicators were not skewed by larger property sales. The price per square foot of a brownstone was $525 in the first quarter, 7.6% above $488 in the prior year quarter and 23.8% above the $424 in the prior quarter. Average sales price followed the same pattern rising 7.7% to $1,410,818 in the first quarter from $1,309,644 in the same period last year and jumped 22.5% from $1,151,398 in the prior quarter.

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