Crown Heights Real Estate Roundup: February 2010
Crown Heights Brownstone Row Houses
When I reported that real estate activity in Crown Heights had gotten off to a slow start for 2010, I had my concerns.
For the record, it’s not unusual under normal market conditions to begin the year with slow sales. The holiday season often causes home shoppers to suspend their search to spend time with family.
But we’re not in a normal market.
In fact, we’re far from it. As the expiration of the Home Buyer Tax Credit draws near, home shoppers are taking longer to make offers. And there can only be one culprit affecting their ability to pull the trigger.
Too Many Homes For Sale in Crown Heights
According to Trulia, as of March 3rd 2010 there were 58 homes For Sale. While that figure appears low compared to Canarsie, where currently there are 343 homes For Sale, for Crown Heights that’s just too many.
Under normal market conditions, there would have been approximately 30 homes For Sale at the start of the year, averaging approximately 22 homes on the market for the remainder of the year.
Since 1995, Crown Heights has traditionally been a low turnover neighborhood, where property is often held by homeowners between 22 to 35 years. Property is often passed directly and indirectly between relatives either through estates, trusts or outright title transfers without purchase money mortgages.
Fueled by the previous real estate boom and renaissance of historic turn of the century row house architecture, Crown Heights saw a sharp increase in real estate activity between 2001 and 2006 in market sales, with most of the activity occurring in the Northern section of the neighborhood.
But with 28 more homes For Sale from the historic average at the start of the year, we are seeing evidence of a growing shadow inventory of properties comprised of homeowners in lis pendens for mortgage default facing Foreclosure.
And the last shoe has just dropped…
Federal Housing Authority Commissioner David Stevens announced changes to their loan programs that will affect the fledgling real estate recovery by
- Increasing the Up Front Mortgage Insurance Premium from 1.75% to 2.25%
- Reduce the allowed concession from closing costs from 6% to 3%
- Borrowers with FICO credit scores below 580 will have to put a 10% down payment to get FHA financing with a 90% LTV
While Washington continues to find the right combination of legislation, regulation and liquidity to solve the nationwide foreclosure crisis, implementing the above measures will reduce the supply of qualified buyers searching for their new home in Crown Heights.
So where has the action been in Crown Heights
In Crown Heights North…
There were no recorded sales for any 1-4 family residential properties in the month of February 2010. While properties continue to be listed For Sale by real estate brokers at or above the median list price of $899,000, home shoppers and property owners are beginning to question their broker’s competence and capabilities.
In Crown Heights South…
There were no recorded sales for any 1-4 family residential properties in the month of February 2010. As was the case in Crown Heights North, real estate brokers continue to price property listings aggressively against a growing trend of continued devaluation, exhibiting a disparity between List Price and Closed Sales Price.
and in Weeksville…
There were 2 recorded sales in February 2010
1462 Park Place - Weeksville, Brooklyn NY
1587 Pacific Street - Weeksville, Brooklyn
- 1462 Park Place was sold for $263,000 on 2/11/10
- 1587 Pacific Street was sold for $217,000 on 2/2/10
As for 1587 Pacific Street, it was sold by Deutsche Bank to Kooba Properties. The homeowner purchased the property on 8/5/2005 for $448,000, in which they borrowed the entire purchase price in 2 mortgages.
1587 Pacific Street demonstrates the trend developing in Weeksville, which will continue to push prices down. The majority of the foreclosure filings in Crown Heights are concentrated in the Weeksville section of the neighborhood.
Stay plugged into our monthly updates on Crown Heights Real Estate to see how the market develops with all the changes occurring in Mortgage Lending, Foreclosures and the Value of Your Home.
About the Author: Michael Corley is a Real Estate Broker, a resident of Crown Heights and Publisher of MyBrooklynReport.com, a blog offering Analysis and Commentary about Real Estate in Brooklyn neighborhoods, its Opportunities and the Politics of Real Estate in NYC.
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Thanks for insight on Crown Heights’s for-sale market.
My interest is Crown Heights South market, which has become increasingly Jewish, and, specifically mixed-use properties.
Is there any evidence that mixed-use properties, say, 2 apts. over ground floor commercial, have any more or less value than 1 – 4 family homes in the area?
Thank you
Well Victor,
The short answer to your question is Use will determine Value.
Since there are more residential properties than there are mixed use commercial properties in Crown Heights South, use value tends to lean in favor of pure residential properties.
However, Mixed Use Properties get their value predominately from their location.
Crown Heights South only has 3 commercial drags where mixed use property has appreciable value: Utica Avenue, Kingston Avenue and Nostrand Avenue.
If you’re trying to identify the best location to invest in Mixed Use Property, I strongly suggest the Nostrand Avenue drag from Eastern Parkway to Sterling Street in Prospect Lefferts Garden.
There is more development along that strip, as well as new homeowners who’ve purchased in the last 6 years eager for more varied retail options for a greater quality of life.
Also, with access to the 2/3/4/5 train service at President St, Eastern Parkway and Sterling Street, Nostrand Avenue has more upside than the others mentioned.
And here’s the best part about that strip: BANKS. Banco Popular is at Eastern Parkway, Chase and Carver are at Empire Boulevard.
BROKER TIP: Identify locations for sale at or 2 blocks away from the subway stations mentioned.
The foot traffic experienced in the AM and PM from commuters is attractive to a broad range of retail proprietors (from cell phones, nails salons, takeout restaurants, etc…)
Leasing to a strong retail proprietor will give your property it’s real value, with the above residential units increasing it’s rate of return.
Good Luck and Keep Reading NostrandPark.com…It’s the real source for everything happening in Brooklyn’s most dynamic neighborhood.
“Since 1995, Crown Heights has traditionally been a low turnover neighborhood, where property is often held by homeowners between 22 to 35 years. Property is often passed directly and indirectly between relatives either through estates, trusts or outright title transfers without purchase money mortgages.”
Is this due to the stable crowd of Hasidic Jews, or is this due to the changing demographics from Eastern Parkway to Lefforts and Albany to Utica? (I think the library to Utica?)
Also, has the Museum on Kingston changed anything since it’s creation as far as property values go in the whole area?
Thanks Michael!
Hi Art,
It may not necessarily have anything to do with the Hasidic Jewish community but that the majority of the housing in Crown Heights is predominately single family homes and apartment buildings.
The turnover is so low because children often will take over their parents property while they care for their elderly relatives.
(at least that what I’ve seen over time in Crown Heights)
And as the recession continues to worsen, more adult children continue to move home for what might become a permanent return.
As for the Museum, if you ask anyone that resides near a museum they’ll tell you that it reduces he quality of life for the community unless their is public green space or recreational/parking area that benefits the general public.
As a cultural institution, the Jewish Children’s Museum offers a rich experience into the lives of Jewish children.
But I don’t think, given the limitations the museum has in offering what the Brooklyn Museum of Art can, it may only increase congestion to the community’s inconvenience.