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MAP: See Where Homes Sold for Above Asking Price in Manhattan and Brooklyn

By Amy Zimmer | July 30, 2015 7:41am | Updated on July 31, 2015 5:37pm
 Homes for sale in neighborhoods including Park Slope are going for above asking price.
Homes for sale in neighborhoods including Park Slope are going for above asking price.
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Flickr/joe holmes

BROOKLYN — If you are looking to buy in Park Slope or Prospect Heights, odds are you'll have to bid higher than the asking price to land the apartment.

Homes in these two Brownstone Brooklyn neighborhoods typcially sold for 4 percent more than their asking prices during the second quarter — the highest percentage in all of Brooklyn and Manhattan, according to a report released Thursday from real estate search site StreetEasy.

"It's very competitive around Prospect Park — the most competitive in the city," said StreetEasy data scientist Alan Lightfeldt. "If you want to buy, especially in Prospect Heights and Park Slope, it's the rule not the exception to pay higher than what sellers are asking. Buyers will be outbid, so prepare for that [and] be resilient."

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Nearby areas are only slightly less competitive.  

Nearly half of Brownstone Brooklyn neighborhoods saw homes sell for their asking price, with many selling for above. That included the borough's fanciest, such as Carroll Gardens (nearly 3 percent) and Brooklyn Heights (nearly 2 percent) and the areas quickly becoming its trendiest — and are considered "emerging" markets by brokers — like Clinton Hill (nearly 4 percent), Windsor Terrace, Kensington and Crown Heights (all roughly 2 percent), and Prospect-Lefferts Gardens (1.4 percent.)

Unlike areas such as Williamsburg, where new development is adding to the inventory, it's harder for developers to build new product in places like Park Slope and Prospect Heights, Lightfeldt said, noting that creates some supply pressure in those areas.

It also makes those neighborhoods attractive to many buyers, he added.

The willingness to pay above asking prices in areas like Crown Heights reflects its "newfound popularity among buyers," Lightfeldt said, as well as perhaps a pricing strategy some brokers employ, setting prices a little low to attract a bigger crowd to an open house.

That, in turn, can help spur a bidding war, experts say.

Lightfeld predicts that some of these neighborhoods will see initial pricing creep higher, so the percent of homes going above the asking price might drop soon.

"It might decline a little bit as sellers become more bold with their initial asking price," he said.

While there was not necessarily a relationship between the actual sales price and how much over the asking price people were willing to spend, it appeared that in Manhattan — which had fewer areas seeing prices go above ask than Brooklyn — sales prices trended higher than asking prices in the borough's less expensive neighborhoods.

The top areas were Hamilton Heights (1.4 percent) and Morningside Heights (1.3 percent) where median sales prices were $506,999 and $475,000 respectively.

"Buyers in those markets are bidding for a lower priced product but are willing to push up prices a little," Lightfeldt said. "It's increasingly competitive for buyers because that price point resonates."

Eugene Litvak, a broker with Compass, said that bidding higher than the asking price has become more common now, especially neighborhoods that are considered more "emerging" like Clinton Hill, Crown Heights or Hamilton Heights, where homes may be listed at prices that are "expensive for the neighborhood," but not as expensive as "prime neighborhoods."

"Although the price might be psychologically high for that neighborhood, it might be lower than you were expecting to pay," he said.

Real estate expert Jonathan Miller calls that process "neighborhood creep" — when "locals in that market are seeing people come in and, in their view, wildly overpaying but in [the buyers'] view getting an incredible discount."

Prices reached record highs in both boroughs, with Manhattan's median of $936,683, up nearly 6 percent, and Brooklyn's median of $526,474, up 4 percent, StreetEasy found.

Still, sellers were clearly able to find willing and able buyers.

"You can almost be assured as a seller you will get your initial asking price," Lightfeld said.

But, he added, "There is such a thing of going too far."

In Midtown, where median asking prices hit $2.195 million, more than 34 percent of homes saw a price cut in the second quarter, according to the report.

In this area, which includes "Billionaire's Row," along 57th Street — home to the $100 million penthouse — "they may need to pull back a little," Lightfeldt said.