MNS Real Impact Real Estate

Introduction

MNS is proud to present the Third Quarter 2013 edition of our New Development Market Report.

New Development Sales data, defined as such “Arms-Length” first offering transactions where the seller is considered a “Sponsor”, was compiled from the Automated City Register Information System (ACRIS) for sponsor sales that traded during the Second Quarter of 2013 (7/01/13 – 9/30/13). All data summarized is on a median basis.

Market Snapshot

Year-Over-Year Median PPSF - up 12.0%
Quarter-Over-Quarter Median PPSF - up 10.8%

Year-Over-Year Median Sales Price - up 7.9%
Quarter-Over-Quarter Median Sales Price - up 1.7%

Brooklyn New Development Sales Inventory - up 12.2% from 2Q13
Neighborhood with the highest inventory - Carroll Gardens (18.5% of all Brooklyn)

Total New Development Sales Volume - up 13.1% to $166.8 Million from $147.5 Million in 2Q13

Largest Quarterly Up-Swing: Clinton Hill
PPSF $799/SF from $579/SF
Sales Price $713K from $534K

Largest Quarterly Down-Swing: Prospect Heights
PPSF $704/SF from $840/SF
Sales Price $586K from $735K

Highest New Development Sale:
Brooklyn Heights-9 College Place- 1H – $3,232,943

Highest New Development Sale PPSF:
Carroll Gardens- 209 Smith Street -1B – $2,564/SF

Market summary:

The Brooklyn New Development market remained strong in terms of increased price and total sales. The number of transactions and sales volume each increased by double digits relative to the previous quarter. This upward trend was driven by a rise in the number of Three Bedroom units sold which achieved the highest Price Per Square Foot (PPSF) of any unit since the beginning of 2013. Although New Development activity showed superior returns throughout the quarter, three neighborhoods did not experience any sponsor sales this quarter: Bay Ridge, Prospect-Lefferts Gardens and Bushwick. This comes as Bushwick has offered very consistent returns in the past several quarters, increasing by nearly 50% in terms of PPSF over the last two years.

Market up-swings:

Clinton Hill and Fort Greene continue to offer substantial returns –both on a short and long term basis. Both neighborhoods experienced over a 25% increase In PPSF since the previous quarter continuing the long-term trend of demand for New Development properties in these neighborhoods. Median PPSF levels have risen in Clinton Hill and Fort Greene by 31% and 38% over the last twelve months, respectively. This trend has been seen throughout Brooklyn as Median PPSF and Median Sales price have both increased by over 30% over the past two years.
Carroll Gardens experienced a series of New Development sales throughout 3Q13, representing over 18% of all transactions throughout Brooklyn in that time. Following the aforementioned trend, sponsor sales of Three Bedroom units continued to achieve considerable returns.

Market down-swings:

Bedford-Stuyvesant experienced the sharpest quarterly decline –dropping 22% in terms of PPSF. With this said, this follows a strong New Development performance throughout the second quarter, where the PPSF increased by 20%. Moreover, the median sales price still increased slightly, 5%, compared to the previous quarter, but sales of over-sized three bedroom units in Bedford-Stuyvesant had a downward effect on PPSF.

Inventory analysis:

Inventory for Studio units across the Brooklyn market remained low –representing a mere 8.15% of total transactions. One and Three Bedroom units represented the majority of New Development Sales throughout 3Q13. Specifically, sales of One Bedroom units in Greenpoint represented 28% of One Bedroom units sold throughout Brooklyn, while 33% of all Three Bedroom units were seen in Carroll Gardens. Furthermore, Three Bedroom units comprised 45% of all New Development Sales throughout 3Q13.

The neighborhoods that sold the most amount of 3Q13 new development inventory per unit size:

Studios - Brooklyn Heights (20%)
One-Bedrooms - Greenpoint (28%)
Two-Bedrooms - Greenpoint / Kensington (15%)
Three-Bedrooms - Three Bedrooms Carroll Gardens (33%)