From boom to bust and back again: That’s the recent history of the home prices in Park Slope, Brooklyn. Since 2010, the height of the last real estate boom, prices have nearly tripled in the borough!
Back then, open houses were crowded and bidding wars were common, just like they are now. Also much like today, at the time industry watchers and experts predicted a slowdown — but few predicted the crash of 2008, which really got rolling when Lehman Brothers collapsed in September of that year.
The market pretty much froze after that debacle, with little available except for short sales and few shopping. Prices (as measured by closed sales) decreased 10 to 15 percent in prime areas and as much as 40 percent on an average fiscal quarter in central Brooklyn.
The market came back roaring in 2012, particularly in Park Slope, Brooklyn, where renovated townhouses in move-in condition could still be found for under $1 million. That didn’t last long.
In 2006, the median price per square foot was $320 for townhouses and $343 for condos and co-ops, according to a report from industry trade association Real Estate Board of New York (REBNY) at the time. Compare that to the median price per square foot for all homes in Brooklyn in the third quarter of 2016: $908, according to Corcoran.
Here’s a look back at key moments in the history of home prices in Brooklyn since 2006.
2006 Highlights; Brooklyn Townhouse Prices May Not Rise Forever
Townhouse sales in Brooklyn surged during the second half of 2005 as a strong economy and low interest rates attracted buyers, according to a Halstead Properties report in 2006. Yet Halstead Chief Economist Gregory Heym predicted the pace would slow soon as supply catches up with demand. At the time, prices for townhouses were averaging around half a million in central Brooklyn, while townhouses in Northwest Brooklyn averaged about $1.5 million.
2008 Overview; Local Housing Market Headed for the Trash Can?
The experts that really know real estate were convinced the New York region’s housing market was about to undergo a serious correction. Nonetheless, pricey Brooklyn had so far mostly weathered the national housing meltdown, and the decline in values here wasn’t expected to be as bad as in outlying suburbs. During the year that ended in November, prices in the NY metro area fell 4.8 percent, according to Standard & Poor’s Case-Shiller Home Price Indices.
2009 Review; US Housing Prices Down 18.5 %, NYC Almost 10 Percent
Property values in the 20 biggest U.S. cities fell an average of 18.5 percent in the year ended November 2008, bringing house prices down almost 30 percent and back to late-2003 levels. New York City prices declined 9.5 percent in the same one-year period.
2012: Brooklyn 2nd Most Expensive Place To Live
As prices started to rebound, Brooklyn was ranked the No. 2 most expensive place to live in the U.S. in the quarterly Brooklyn Cost of Living Index by the Council for Community and Economic Research, a Washington-based research group. First was Manhattan, followed by Brooklyn, then Honolulu, San Francisco, San Jose, Queens and Stamford, Conn. The report ranks 300 urban areas weighted according to different types of costs for “mid-management households” — in other words, professionals and managers. In New York City, the biggest and most important cost is housing.
2013 Highlights; Brooklyn Home Prices Set 10-Year Record
Brooklyn home prices hit a 10-year record high, with the average now $694,777. That may not sound super expensive but the figure included apartments as well as houses in every neighborhood throughout the borough. “Before the economic meltdown, the average price of a Brooklyn home hit $603,428 in 2007 — then sank to $494,720 in 2009 — but has rebounded to a stunning $694,777,” said the New York Post at the time. The paper attributed the rise to “surging demand” and “low-but-rising” interest rates. Brooklyn “isn’t a discount neighborhood anymore,” said Corcoran Group CEO Pam Liebman.
2014 Highlights; Brooklyn Least Affordable Place to Buy Home
In 2014, Brooklyn had the “least affordable” home market in the country, followed by San Francisco and Manhattan, in that order. Real estate investors and foreign buyers are partly to blame, along with stagnating incomes, according to RealtyTrac. Across the country, housing prices were up 25 percent since their February 2012 nadir, according to the S&P/Case-Shiller index.
2015: Brooklyn Home Prices Surge 18 Percent, Hottest Since Recession
Brooklyn home prices surged 18 percent in the third quarter of 2015, according to Douglas Elliman. Low supply and increased demand amped up the average sales price to $856,839. Brownstone Brooklyn was particularly hot, with the average sales price jumping 28.9 percent over last year, to $2,704,844. “The Brooklyn brand is taking over neighborhood after neighborhood,” Ideal Properties Group Managing Director Aleksandra Scepanovic claimed.
2016: Park Slope Home Values Jumped 194 Percent Since 2004, Highest Increase in Country
What we saw: Home prices in Park Slope have increased 194 percent since 2004. That’s the largest gain out of any area in the country’s 300 largest cities. The median price for a single-family home in the neighborhood is now over $1 million, even though the area’s median income is only about $44,000.
Fisher Stone Small Business & Real Estate Lawyers Of Brooklyn, P.C. 88 Suydam St Suite A, Brooklyn, NY 11221 (718) 285-9404 https://fisherstonelaw.com/ – Specializing In Legal Representation For Buyers & Sellers In Park Slope, NY.