City's Housing Bounce Spreads Beyond Manhattan

Wall Street JournalJuly 23, 2013
In Long Island City, a renovated property on 51st Avenue has just received several purchase offers for around $3 million, brokers say, potentially setting a record price for a townhouse in Queens. In Park Slope, a restored townhouse on 10th Street found a buyer after a single open house. It was listed for just under $2.7 million.

Sandy's impact continues for some properties such as in Staten Island's Midland Beach.
Such experiences are becoming more common in a newly resurgent housing market across New York City this year: Recent gains in other boroughs are outpacing those in prime Manhattan neighborhoods, where the market rebounded sharply last year.

A new report by the Real Estate Board of New York, an industry trade association, found that city-recorded sales of homes outside of Manhattan, including condos and co-ops, rose 13.4% during the second quarter, compared with the same period in 2012. In Manhattan, overall sales were flat in the latest quarter, the report found.

Excluding condos and co-ops, the pickup for one-to-three-family houses was even stronger. A total of 4,486 sales were recorded outside of Manhattan in the second quarter, a 20.5% increase over the year-earlier period. The largest sales rebounds were in Staten Island and Brooklyn. In Manhattan, where there are few one-to-three-family transactions, the number of sales still rose in the latest quarter.
The report found that some of the worst-performing areas were Sandy-damaged neighborhoods such as Howard Beach and the Rockaways in Queens, and Midland Beach in Staten Island. But even there, brokers say, pricing in some areas has stabilized, as bargain hunters stepped in to buy both renovated house and some still needing repairs.

The city's housing rebound has expanded outside Manhattan to Park Slope, Brooklyn.
Michael Slattery, the board's senior vice president for research, said that sales outside Manhattan slowed down sooner than Manhattan in the housing slump and were slower to recover. Instead, he said, the city pattern excluding Manhattan more closely resembles that of the single-family-home market across the country, where low interest rates and growing confidence in the economy sparked a housing recovery this year.

"Outside Manhattan the bounce back has been more recent," he said. The report put the median price of a one-to-three family house at $458,000, a price that showed that despite a stronger market, "the middle class can afford to live in New York City," he said.

In Manhattan, sales of homes selling for more than $10 million fell to 22 in the latest quarter from 40 in the first quarter and 30 in the 2012 second quarter, according to the report.
Overall, Manhattan remains the prime market driver, making up 58% of the $8.2 billion in residential transactions filed with the city in the second quarter while the borough has only 18.5% of the owner-occupied housing stock in the city.

Still, the city's housing recovery is far from complete. Real Estate Board figures show that average prices in the second quarter were still 5.5% below prices recorded in the second quarter of 2008.
But that isn't worrying Doron Zwickel, a broker at CORE with the listing for the townhouse on 51st Avenue, a prime location in Hunters Point in Long Island City. The 21-foot-wide brownstone with six bedroom, bare brick walls and oak floors was listed for $3.25 million in April.

He said that as a string of high-rise rental buildings went up near the East River in recent years, some renters have started looking for bigger homes in the same neighborhoods. With the supply of townhouses limited, prices have been pushed higher.

"Talking about buying a property for $3 million here is no longer a profanity," Mr. Zwickel said. "We have gotten tons of interest and multiple offers."

Rebekah Witzke moved with her husband and three children to a Long Island City rental from the Upper East Side last year. Working with Jonna Stark of Nest Seekers International, she has been searching for a house but says everything she has seen is too expensive or needs too much work. "The inventory is so low and everything is going so quickly," Ms. Witzke said.

In Park Slope, prices and sales are rising. The report found that the median price in the neighborhood was $1.75 million in the second quarter, up from $980,000 a year earlier. There were 36 sales recorded in the second quarter up from 24.

The house at 418 10th St. in Park Slope that listed for just under $2.7 million was 18 feet wide and was renovated with a sweeping main staircase and a fancy kitchen opening out on the garden. It went on the market in late June and immediately attracted attention.

"If you've got something nice and if it's priced right, it is going to get a lot of attention and multiple offers," said Carol Graham, a broker at Corcoran Group who has the listing. "But you still can't be stupid about pricing.”

In Howard Beach, where the storm flooded many homes, the number of sales fell sharply in the latest quarter and the median price per square foot fell 30%, according to the report.

"There was a lot of panic selling; there was a big scare factor," said Jerry Fink, a broker based in Howard Beach. But Mr. Fink said prices had stabilized and have begun to rise in some parts of the area.

"You still have a great neighborhood," he said. Now that memories of Sandy begin to receded he said some buyers see the storm's aftermath as a buying opportunity.

But on the south shore of Staten Island, where repairs on many Sandy-damaged houses are incomplete, would-be sellers are finding buyers only by dropping prices, while prices are rising in many other intact Staten Island neighborhoods.

In Midland Beach, a newly renovated house on Patterson Avenue a few blocks from the water went on the market in April for $349,000, close to what it sold for in 2009. Since then, the asking price has been cut twice to $329,000.

"Prices are very low," said Dritan Gashi, a broker with Robert DeFalco Realty who has the listing. "People are worried about Sandy, but when the price is low there is interest."

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