Gregory J. Heym
Executive Vice President, Chief Economist
Executive Director of Development Marketing
By JOSH BARBANEL
The housing market in most of New York City is outperforming markets in the rest of the country this summer, with prices rising modestly as employment grows in the city.
In Brooklyn, median prices for apartments and houses rose 3.9% so far in the third quarter to $467,600, up from $450,000 in the second quarter, according to figures provided by Streeteasy.com.
In Queens and Staten Island, median prices were up 6.5% and 1.7% to $350,000 and $376,0000, respectively.
Those price gains were outstripped by the performance in Manhattan, where the median price rose by 18.5% to $900,000 according to the Streeteasy.com report.
Only the Bronx posted a decline in median prices so far in the third quarter, falling 1% to $310,000 compared with the second quarter.
The price gains in most of the city contrast with many other regions of the country where there are growing fears that prices are beginning to stagnate or even fall.
The expiration of federal housing tax credits sent a chill across the country last week as the government reported that sales of existing homes fell 27% in July.
But compared with the results nationally, the expiration of the tax-credit program appears to have had a much more limited impact across New York City. The number of closings surged across New York City during June, but the closings reported so far for July remain near the sales pace posted in May, according to the Streeteasy.com figures.
"We had an outstanding spring and a flat summer," said Frank Percesepe, who oversees sales in Brooklyn for Corcoran Group.
"I don't see prices dropping again. A double dip could happen in the rest of the country, but I don't see it happening here," he said.
The number of closings was up 70% in June from May across the city, including an 86% increase in Brooklyn and 77% increase in Queens.
In July the number of closings didn't collapse, but preliminary figures show they fell back to about 10% below the levels in May.
There was even a measurable effect of the tax-credit program in Manhattan, even though it was limited to properties costing $800,000 or less, the maximum price under the tax-credit program.
Many brokers initially discounted the effect of the federal tax-credit program in Manhattan, but on the last day in June, which was the initial deadline under the tax program, sales on 160 apartments were closed, a record for the year.
Seventy percent of those deals involved units costing less than $800,000. The deadline for the tax credits was eventually extended.
Brokers attribute the recovering median prices in most of the other boroughs to falling unemployment in New York City and to improving local economy.
"The economy is recovering quicker than it is across the nation," said Gregory J. Heym, chief economist at Halstead and Brown Harris Stevens.
"We didn't lose the number of jobs that we thought and added jobs back quicker than we thought."
Jimmy Liu, a broker at Century 21 Sunshine in Elmhurst, Queens, said that business "is a little slow, but there is still a lot of looking."
He said that many buyers, have read that housing prices across the country will tumble again and are waiting and watching. "Buyers are expecting a big drop in prices, but it is not really happening here," Mr. Liu said.
Roberta Benzilio, executive director for sales in Brooklyn for Halstead, said that last year the summer was very busy, as sales began to thaw after the worst days of the downturn, but this year, "we are back to a traditional summer slowdown."
"June was pretty brisk, July was OK and August is slowing down," Ms. Benzilio said. "Now we are looking forward to September."
Monday, August 30, 2010