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Brooklyn Real Estate: Steady as it Goes

Prudential Douglas Elliman just released its first-quarter market report for Brooklyn, which is the handiwork of appraiser Jonathan Miller, and it makes for some decent bedtime reading. Not much stands out, which is probably a good thing, and simply a sign of a stable market: The biggest things of note, to us, were that the borough-wide median sales price declined 5.3 percent to $450,000 from $475,000 from the same period in 2011 and, what’s more remarkable, that listing inventory dropped 16.7 percent, to 6,092 units from 7,316 units, during the first three months of 2011. The official line on the inventory drop is as follows: “Listing inventory fell sharply from the same period last year and is now below the five year average. Falling inventory has helped the market stabilize and caused the listing discount to compress.” The other point of interest is that condo sales were dead on arrival: Down 41.2 percent to 186 units from 923 units in the same period last year, though condo sales can fluctuate wildly depending on when buildings launch. (Not that there are that many launching these days.) And here’s one for team bull: broken out by region, brownstone Brooklyn was hitting it out of the park in prices, with the median sales price at $1,730,000, up 54.4 percent year over year from $1,120,733, though the total number of sales was down 26 percent. Michael Guerra, an executive vice president at Elliman, tells us that what his brokers are seeing is that the market has gotten hot since February, which isn’t reflected in the stats for the first quarter, and that not only is there huge attendance at open houses, but buyers are often willing to offer “significantly” more than 20 percent down. The trouble, he says, is that inventory levels are so low that there’s just not much to show prospective buyers. Guerra says that now that we’ve seen three quarters in a row of stability in the market, buyers’ attitudes have gone from “tentative to confident.” Meanwhile, Miller tells us that the “macro” view for Brooklyn is that the borough “has seen relative stability for the last two-and-a-half years” but what’s going to make stuff interesting is that the “decline in inventory isn’t consistent with the decline in sales.” This phenomenon has to do with several factors, but one of them is that houses in some stage of the foreclosure process need to be flushed out (our words, not his) in order for a truly clear view of the market to emerge.

Brooklyn 2012 Quarter 1 Market Report [Elliman]