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Home Prices in Popular Brooklyn Areas Expected to Dip This Year

By Amy Zimmer | March 25, 2016 8:13am
 The open kitchen at 296 Sterling Place in Prospect Heights, a three-bedroom/one-and-a-half bath co-op listed by Compass for $1.65 million, down from $1.799 million.
The open kitchen at 296 Sterling Place in Prospect Heights, a three-bedroom/one-and-a-half bath co-op listed by Compass for $1.65 million, down from $1.799 million.
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BROOKLYN — Despite the seemingly unending upward trajectory of Brooklyn and Manhattan home prices the last few years, the market is cooling down, especially in some of Brooklyn’s most popular neighborhoods.

Median sales prices in Northwest Brooklyn — which includes neighborhoods like DUMBO, Brooklyn Heights, Carroll Gardens, Gowanus, Red Hook, Fort Greene and Clinton Hill — are expected to dip by nearly 2 percent over the next 12 months, according to an analysis released Friday by the search engine Streeteasy .

While that’s the only area where negative growth is expected, price growth in Brooklyn and Manhattan across the board is expected to slow over the next year.

The median resale price in Manhattan hit $982,437 last month, representing a 4.4 percent increase from the year before. But over the next 12 months, Streeteasy predicts prices will only grow by 3.2 percent.

In Brooklyn, the median price was $539,300 in February, which was nearly 7 percent higher than a year ago.

But prices in the borough are essentially expected to remain flat, growing less than 1 percent, according to the Streeteasy forecast.

“Our forecasts for Brooklyn and Northwest Brooklyn are heavily influenced by recent price declines,” Streeteasy data scientist Alan Lightfeldt said. “The median resale price has fallen each month since December 2015 in Brooklyn and since September 2015 in Northwest Brooklyn.”

Price growth is also expected to cool significantly in the Prospect Park region, which includes Park Slope, Prospect Heights, Prospect Lefferts Gardens, and Kensington, he noted.

“The entire market is headed toward a slower growth pattern, but it’s the normal wax and wane that real estate markets cycle through,” Lightfeldt said.

In Northwest Brooklyn, where the median price in February was $784,263, there was strong price growth in the first half of 2015. Then the momentum faded, Lightfeldt said.

Still, even with prices cooling, homes are still out of reach for many.

“Historically speaking, prices throughout Brooklyn are still quite high,” he added, “but we don’t expect growth to match what we experienced in 2015.”

The highest median price in Manhattan was in Downtown, at $1.23 million, followed by the Upper West Side at $1.089 million.

In Brooklyn, the highest median was for Williamsburg and Greenpoint in North Brooklyn at $896,493, followed by the Prospect Park area at $803,248.

Already, sellers are adjusting their expectations in terms of what their homes can fetch, and price drops are becoming more common, experts said.

In a recent Open House Insider column, for instance, the three apartments featured with upcoming open houses — all in prime locations with coveted features like pre-war details, beamed ceilings, exposed brick and two bathrooms — had recent price drops.

“The market has shifted,” said Compass broker Sean Sasso, explaining why the Prospect Heights three-bedroom co-op with 14 oversized windows with Manhattan and Brooklyn views saw a price reduction from $1.799 million to $1.65 million in a matter of weeks.

The new asking price for the home at 296 Sterling Place, however, would still set a record for a co-op in the area, he noted.