Gregory J. Heym
Executive Vice President, Chief Economist
By JOSH BARBANEL
Home sales plummeted by more than 20% in Brooklyn and Queens last quarter, a drop reflecting the expiration of federal housing tax credits for buyers.
The tax credit of up to $8,000 to home buyers spurred sales across the country. But after the deadline—buyers were required to close on purchases by the end of September—sales fell sharply in most areas.
The effect was much more subdued in the expensive Manhattan market, where many sales were well above the $800,000 price limit for the program.
Now a series of market reports on fourth-quarter sales in Brooklyn and Queens underscore that the end of the credits affected buyers there more like the rest of the country than their neighbors in Manhattan.
"Where did the additional buyers come from in the first half of the year?" asked Jonathan Miller, an appraiser and president of Miller Samuel Inc., which prepared reports for Prudential Douglas Elliman. "They came from the future."
In Brooklyn, the number of closed sales of co-ops, condos and houses fell 21.9% from the previous quarter, and dropped 29.9% from the 2009 fourth quarter when sales surged.
In Queens, sales were down by 20.2% from the previous quarter and 41.7% from the year-earlier quarter. Median prices were off a bit in Brooklyn and up in Queens.
But with the large shifts in the mix of properties that sold, analysts said it was difficult to gauge where the market might be heading in the months ahead.
The market reports found some signs of strength in the most affluent neighborhoods of Brooklyn closest to Manhattan, which attract some of the same buyers looking for co-ops and condominiums in Manhattan.
Greg Heym, an economist who prepared market reports for Brown Harris Stevens and Halstead, said that expensive sales had picked up. In Brooklyn Heights and surrounding neighborhoods, there were 38 sales of condos for more than $1 million last year, he said, almost double the number the year before.
Mr. Heym said that there were pockets of foreclosure and high inventory, but that markets in many neighborhoods were likely to strengthen next year.
"The economy is going to continue to get better and some areas are going to get better a lot quicker than others," he said.
In Brooklyn, after a rise in prices in the fall, the median price was off 2.2% to $475,000, while in Queens the median price rose 3.9% to $369,000, according to the Elliman report.
Still prices in Queens were 23% below the peak in the first quarter of 2007, while prices in Brooklyn were 12% below the peak in the 2006 third quarter.
Thursday, January 20, 2011