Gregory J. Heym
Executive Vice President, Chief Economist
Author: Philana Patterson
This Brooklyn Heights townhouse was the priciest sale in the borough last year, fetching $8.5 million.
The Brooklyn townhouse market is likely to stay flat or see single-digit percentage increases this year after a couple of years of dramatic growth, according to brokers.
To date in 2006, Brooklyn townhouse prices overall have risen 5 percent compared to last year, said Sandra Dowling, owner of Brooklyn Heights Realty. But she said prices this year may not appreciate from current levels.
"I think we're going to see prices holding steady, not the 20 or 30 percent a year increases that we have been seeing," Dowling said. "We get plenty of calls, but the buyers are little more price-conscious." She said she's seeing the greatest interest in Park Slope, Red Hook, and Carroll Gardens.
Broker Herbert Kliegerman, president of North Brooklyn Realty Corp., said he sees prices "flattening" in 2006 in the Williamsburg and Greenpoint neighborhoods, where he does much of his work. He said he believes that a lot of the slowdown is because of the media hype about a slowdown. Still, over the next three to five years, prices should continue to appreciate in the neighborhood, he said.
It's also taking longer to sell houses. A lot of buyers are "just looking," Dowling said. Instead of the bidding wars of the recent past, now the focus of brokers is on setting the right asking price, finding that one "serious" buyer and managing sellers' expectations, she said.
"We tell the sellers what the market is telling us and we ask them to be flexible," Dowling said. "They are taking it well, but it depends on their motivation to sell."
Anecdotal information aside, according to the latest hard data available, price gains had already moderated by the end of 2005 as concerns about the economy weighed on potential buyers' minds.
Data released last month by Halstead Property, which pulls the deed from every townhouse transaction in Brooklyn each year, found third quarter townhouse prices were up 28.9 percent compared to a year earlier, but the spread between current year and previous year prices had dropped to 26.6 percent by the fourth quarter. Halstead defines a townhouse as any one-to-four family home without commercial space.
"There was some flattening," said Greg Heym, chief economist for Halstead and sister brokerage Brown Harris Stevens. "It mirrored what you saw in the Manhattan market."
A look at the figures from the Real Estate Board of New York's first-ever report on the Brooklyn real estate market, which examined sales of one- and two-family homes, showed slightly smaller gains for 2005 -- an average rise of 20.5 percent in prices.
Still, last year was a banner year for the most expensive Brooklyn townhouses.
The priciest Brooklyn sale was a two-family townhouse at 212 Columbia Heights in Brooklyn Heights for $8.5 million, which sold in May. Book agent Nina Collins and her hedge-fund executive husband Marek Fludzinski were the buyers of the 25-footwide, five-story brownstone, which is in need of renovation, according to reports.
The second-most expensive townhouse sale was a two-family home in Bay Ridge at 584 78th Street, which sold for $7.9 million in December. Third on the list was a Cobble Hill townhouse at 234 Clinton Street, which sold for $4.5 million.
Looking at Brooklyn by neighborhood, Williamsburg and Greenpoint, collectively, saw the biggest price increases in the second half of the year. In its report, Halstead divided Brooklyn into four areas, roughly comprising western, central, northern, and southern Brooklyn (for a more detailed neighborhood breakdown, see chart below).
Average selling prices in Williamsburg and Greenpoint in northern Brooklyn rose 58 percent in the second half of 2005 from a year earlier, to $751,095, Halstead found. Some of the reason for the jump was that townhouses sold in the neighborhoods were larger than before, Heym said. But on a per-square-foot basis, prices were up 21 percent, he said.
Kliegerman of North Brooklyn Realty said Polish immigrants who dominate Greenpoint, many of whom have owned their property a long time and are growing older, are selling their homes to move to warmer climes such as Florida.
Many are ready to make deals. One client could have gotten $700,000 for her property, but she decided to sell it for $25,000 less, Kliegerman said, because she had already made so much money and because "the guy was so nice."
Central Brooklyn -- the area that includes Bedford-Stuyvesant, Clinton Hill, and Fort Greene -- saw the second-highest price increases, with prices up 39 percent in the second half of the year compared to the year before. The average townhouse price was $594,481, according to Halstead.
Broker Eva Daniels of Eva Daniels Realty said high-end buyers in Fort Greene are getting choosier, and many want something that doesn't take a lot of work to renovate.
"There are fewer buyers on the higher end now and those fewer buyers are being very selective," she said.
In 2004, "something nice could be bought in Fort Greene for slightly over $1 to about $1.5 million," Daniels said. By the summer of 2005, she had listings for townhouses in the neighborhood for up to $2 million, but some of them needed at least $100,000 worth of work to bring them to the level buyers wanted. "People who could afford it wanted something that they didn't have to put anything into," she said.
In traditional "Brownstone Brooklyn," generally the western part of the borough -- made up of Boerum Hill, Brooklyn Heights, Carroll Gardens, Cobble Hill, and Park Slope -- prices rose 25 percent in the second half of the year, not as fast as northern and central Brooklyn. Nevertheless, the average price of a townhouse was the highest of all areas of Brooklyn at $1.5 million, Halstead reported.
It remains the case that for the cost of a luxury two-bedroom apartment in a doorman building in Manhattan, a buyer can buy a townhouse in one of these Brooklyn neighborhoods with lots of space, said Mohamed B. Mohamed, an agent at Nancy McKiernan Realty. He recently got five offers for a three-story, two-family brownstone. "The seller was asking $1.495 million and it went into contract for $1.626 million," Mohamed said.
Southern Brooklyn -- Bay Ridge, Bensonhurst, and Dyker Heights -- saw the slowest increases of the four sections of Brooklyn, though prices were still up 22 percent over the previous year. The average price of a townhouse there was $726,965, according to Halstead.
Saturday, April 01, 2006