12/02/08

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Outer-borough markets strike cooler note for autumn

Prices in New York's outer boroughs fluctuated during the year, generally increasing -- in some places, dramatically -- and now are cooling a bit. Below is The Real Deal's first quarterly residential market report for the outer boroughs, which also examines new developments poised to alter these markets and their prices as they exit 2005.

Queens
Queens' prices entering the fall mirrored those of Long Island neighbors Suffolk and Nassau counties more than those of Manhattan or even Brooklyn.

The median and average sales prices for homes in Queens were both around $450,000 at the end of August, according to the Multiple Listing Service of Long Island. In Nassau, the median price was $500,000; in Suffolk, it was $400,000.

For Queens, the end-of-summer prices represented increases over August 2004, although the average price is a slight decrease from July 2005, when it shot above $450,000.

The most new development in Queens can be found in Long Island City, where the first luxury condos are set to hit the market this month, to be followed by many more (see cover story). In Astoria to the northeast, Astoria Condo at 28th Avenue recently sold out its 38 units in three months, said Adriano Hultmann, a broker with the Corcoran Group who brokered in the tower. Studios in the building went for around $210,000, Hultmann said, and two-bedrooms for $400,000.

Generally, in Astoria -- a neighborhood increasingly popular with commuters to Manhattan -- prices go up in proximity to mass transportation, Hultmann said. "Astoria," he said, "[the price] depends on how far it's from the train station and the amenities."

Time on the market in Queens has increased, and that means some adjustment to price tags. In late September, a one-bedroom in an Elmhurst co-op with no doorman sold for $175,000 after a three-day bidding war. The original asking price had been $169,000, said Kathy Tsao, head of Prudential Douglas Elliman's Flushing office. The key to that deal, she said, was pricing the one-bedroom correctly. Otherwise, it risked sitting on the market longer.

"People in Queens are buyers," she said. "They're not speculators. So, the pricing is one of the most critical things. If you price it correctly, usually within the first month or so you should get some activity."

Brooklyn
Brooklyn reached mid-year with an average co-op sales price of $478,000, according to an August report from the Corcoran Group, the most recent study available. The median co-op sales prices reached $393,000. Both figures represented double-digit percentage increases over the same period in 2004.

All sizes of Brooklyn housing experienced an increase in average sales prices during the first half of 2005, according to Corcoran, and two- to four-family townhouses saw the sharpest increase -- 41 percent between June of 2004 and the tail end of this past summer.

What would be the nation's fourth-largest city continues to be New York's fastest-developing borough. Dumbo is the Brooklyn neighborhood seeing the most development as the year ends, says borough native William Ross, executive sales director for Halstead Brooklyn. Ross cited two large projects that recently went on the market in Dumbo -- the 34-story J Condo and the 259-unit building at 70 Washington Street -- and two smaller ones on Front and Adams streets as evidence of the relatively new neighborhood's growth.

"So those are two huge projects and two medium-sized projects," Ross said, "all in one small neighborhood. So, if you're looking for the [Brooklyn] neighborhood where the most sales are occurring, it'd be Dumbo."

At 70 Washington, units with no river views, Ross said, are going for about $800 to $825 a square foot; those with river views that include Downtown Manhattan are selling at more than $1,000 a square foot. By early October, 70 Washington was about half-sold, Ross said.

Brisk condo development is also under way in Sheepshead Bay -- at least 515 units are in the pipeline and 233 approved through July, according to data from the New York Attorney General's office. Because it's tucked away at least 45 minutes by train from Manhattan, a lot of the Sheepshead Bay development, Ross said, is "sort of below the radar, but it's happening."

And the city recently committed $80 million in government monies to the redevelopment of Coney Island, including the neighborhood's famed amusement park. The plans include making Stillwell Avenue into an open space that would connect the park with new residential development.

"I am going to make a prediction," Ross said. "In two to three years, you're going to see a lot of condo development in Coney Island."

The Bronx
The Bronx may face the toughest housing market in the city as it enters 2006.

"My call volume has gone down 10 percent of what it had been from the spring," said Joe Hessler, president of Hessler Realty in the Bronx and vice president of the Bronx-Manhattan North Board of Realtors. "I talk to a lot of other Realtors, and the volume is just staggering, the way it fell off."

A struggling economy in a borough that feels such downturns more acutely than others in the city could be the biggest culprit in the Bronx's end-of-the-year housing lull.

Think of the rising price of heating oil this winter and the effects of even small interest rate increases in a borough that has a median household income of $27,611, according to the U.S. Census Bureau.

The Bronx's richer northern neighbor, Westchester County, is seeing houses sit longer on the market than earlier this year. This can have a trickle-down effect on housing sales in the Bronx's more affluent neighborhoods, such as Riverdale, Hessler added.

In terms of new construction, larger-scale projects have gone up in northern neighborhoods including Riverdale, Pelham Gardens, and Woodlawn as developers rush to escape recent downzonings, but the people needed to fill them may not move in.

Most of the Bronx's recent development has happened in Riverdale. More than 330 saleable condo units were in the pipeline in that northwestern enclave as of September, according to an analysis of government data by The Real Deal.

Staten Island
Not surprisingly, the city's least populous, most suburban borough has seen some of the cheapest home prices in 2005. But, like its more populous brethren, the market in Staten Island seems to be cooling.

"It's been a very good summer, but things are changing," said Dennis Semenza, a broker with Re/Max Regal Realty who's been brokering on Staten Island for 18 years. "We've been in what I call a 'price sensitive market' for a while, where, if you want to sell, you can sell -- you just got to price it right. If you overprice it just by a little, it's not going to move. Now, I've got a couple of houses and I think they're priced right, and they're not even getting showings."

Numbers for the summer remained sketchy as of mid-October, said Sandy Krueger, CEO of the Staten Island Board of Realtors. For the first six months of 2005, the most recent figures available, 279 condos were sold on Staten Island, 48 co-ops, and 413 attached residences with three or more units.

The average sales price for a condo in the first six months was $268,000, and the average sales price for a co-op was $137,500.

For units in the attached residences, the average and median sales prices were both around $325,000. All of these prices represented increases over the prices during the first six months of 2004.