Halstead Property

William S. Ross
Director of Development Marketing
wross@halstead.com
(212) 613-2001

Condos On The Chopping Block

Prices come down to help move new projects

Brooklyn

The majority of Brooklyn's 23 neighborhoods saw overall price drops. Prices were slashed at 183 units with an average price decrease of $42,195. There were 103 listing increases averaging $34,660.

In the popular and increasingly saturated new condo market in Williamsburg, where the market varies by area, there are bound to be price changes.

"Williamsburg is definitely a hotbed of activity so you're going to have more competing developments," said Kim of StreetEasy.

Williamsburg was home to the greatest number of units with price changes (104). Developers raised prices 64 times and lowered them 40 times. The majority of the price increases were at Northside Piers. Without that project, the area would have done poorly with 40 price decreases and only 11 increases.

Northside Piers, a Toll Brothers project marketed by Halstead Property, had 53 price increases — four units at the project had as many as four price changes — in the three months, with an average price change of $40,302, StreetEasy data indicate. Although increases might seem strange considering Toll Brothers reported its eighth-consecutive quarterly decline in revenue last month and might want to sell units quickly at lower prices, prices were too low from the start, said a broker who has worked on the project.

"Northside was the first tower ever in Williamsburg," said William Ross, a director in new development marketing at Halstead, and former director of sales for the Brooklyn office. As such, Ross said the team did not how to accurately price the units. "We did the best we could," he said.

The majority of the 180 units in the building have had price adjustments, Ross said. Last April, Halstead reduced the prices of 35 units in the building, all large units with unimpressive views, by an average of 12 to 15 percent, or $65,000 each. "We found out the larger units that don't have views didn't sell until we did the decrease," Ross said.

The numbers for Clinton Hill (24 price reductions and three increases) and Park Slope (18 decreases and zero increases) were pretty weak, but some brokers attribute the price drops to developers trying to push the neighborhood boundaries.

As the boundaries of Clinton Hill and Park Slope expand farther away from main transportation lines, so do price reductions. Homes in the heart of Park Slope and along brownstone row in Clinton Hill are selling well, said Tom Le, vice president and associate broker at the Corcoran Group in the Williamsburg office. But projects on the outskirts are on shakier ground. Too many developers do not create the right product in the right location, Le said.

Sunday, June 01, 2008