A new report out today shows that new condominium developments are helping stave off a housing slump in Brooklyn. The Prudential Douglas Elliman Brooklyn Market Overview, the brokerage firm's first report on the borough, shows that new developments made up 51% of all condo sales, and that they sold on average for $649 a square foot, an increase of 27.5% versus the prior year period ó and $153 a square foot more than resale condos.
"New development has been a very significant addition to the market," the president of Miller Samuel Real Estate Appraisers, Jonathan Miller, whose firm wrote the report, said. "The 51% market share is telling you that there is market acceptance of new development."
For the overall condominium market in Brooklyn, the median sales price was nearly $515,000, or 8% higher than the same period last year. The average price a square foot was $575, a more than 16% increase over last year.
Still, all is not perfect in Brooklyn. The pace of sales in the borough dropped 43.6%, or more than 1,500 units, in the second quarter compared with the year-earlier quarter. The median sales price fell nearly 2%, to $525,000, or $10,000 less than the prior-year quarter.
"Relative to most major metro areas, the New York region has done better," Mr. Miller said. "The results that you are seeing here are generally better than you're seeing in other markets, primarily because while there was speculation in Brooklyn, it wasn't as rampant as those in South Florida or Southern California. There is clearly a lower amount of activity as we have seen in all other regions of New York; this is not unique to Brooklyn."
While the median price fell, the average price in Brooklyn increased 2.4%, pulled up by the higher prices of new developments in certain neighborhoods. The areas with the highest prices were in the north and northwest portions of the borough, including Williamsburg/Greenpoint, Brooklyn Heights, Carroll Gardens, Park Slope, and Red Hook.
"If you look at the median sales price for the four regions, both north and northwest are showing an increase, up 9% and up 7.5%, while south is down 2.6% and east is down 2.9%," Mr. Miller said. "There is such segmentation within the borough, and that's what's unique about Brooklyn. The housing stock has many different characteristics."
Some real estate professionals dispute the Douglas Elliman data: "The price a square foot has stayed the same for about a year and a half," Elan Padeh, the president of the Developers Group, which is selling 22 developments in Brooklyn, said. "I haven't seen a 43% decrease in sales either. We see a slowdown as far as people walking through. We haven't seen any drop in sales."