Home sales in Brooklyn, New York’s
most populous borough, declined in the third quarter as a
falling supply of properties gave would-be buyers little to
choose from.

Purchases of condominiums, co-ops and one- to three-family
homes totaled 2,171, down 2.2 percent from a year earlier, New
York appraiser Miller Samuel Inc. and broker Prudential Douglas
Elliman Real Estate said today in a report. The inventory of
homes listed for sale dropped 16 percent to 5,602.

“The last couple of years in Brooklyn, you’ve had a lot of
the excess supply worked off,” said Jonathan Miller, president
of Miller Samuel. “It’s getting to the point now where it’s
starting to restrain gains in sales.”

The inventory has decreased in each of the past four
quarters as owners are in no rush to list their homes in a
market where leasing costs are poised to climb, according to
Miller. Those who bought during the real estate boom and saw
their values tumble in the crash may not have built up enough
equity to trade up, he said.

Buyer demand will last as long as borrowing costs are low,
Miller said. The average rate for a 30-year fixed U.S. home loan
fell to a record 3.36 percent earlier this month, according to
McLean, Virginia-based mortgage-finance company Freddie Mac. The
Federal Reserve has signaled it will keep interest rates low
through 2015.

Selling Pace

The pace of sales in the third quarter was the fastest
since Miller Samuel began tracking the data in 2008. The
absorption rate, or the amount of time it would take to sell all
the listed properties at the current pace of deals, was 7.7
months, down from nine months a year earlier. Properties spent
an average 117 days on the market, or 22 percent less time than
last year.

“If it continues at this pace, the problem is going to
become acute and we’ll start seeing more pronounced price
appreciation,” Miller said.

The median price of Brooklyn homes that sold in the quarter
was $506,000, little changed from a year earlier and 6.3 percent
below the 2007 peak, he said.

Home prices in the borough slid as much as 18 percent from
that peak to their bottom in the second quarter of 2009,
according to Miller.

Corcoran Group, which also released a third-quarter report
today, said the median price of resale co-ops and condos in
Brooklyn was $439,000, up 1 percent from a year earlier and 13
percent from the previous three months.

In new developments, the median sale price climbed 12
percent from a year earlier to $635,000, New York-based Corcoran
said.

To contact the reporter on this story:
Oshrat Carmiel in New York at
ocarmiel1@bloomberg.net

To contact the editor responsible for this story:
Kara Wetzel at
kwetzel@bloomberg.net