– Empirical data indicates the Brooklyn residential real estate market is performing particularly well
– New construction sales are one of the drivers of growth with sales activity steadily increasing
– However quarterly pricing & market share of new developments have shown moderate volatility with median sales prices increasing to $510,000 in Q3 before falling to $454,383 in Q4 2011
– Similarly, market share of new condos as a percentage of all sales constituted 17.4% of sales in Q3 before falling to 16.5% in Q4 of 2011
– Our expectation is that Brooklyn’s residential real estate prices will continue to show resilience in the face of ongoing lackluster performance in the regional economy
– Some market segments are likely to see short term volatility in year on year and month on month pricing however this would be entirely consistent with past cyclical behavior
– While loans to property developers across the country have historically been vulnerable to deterioration, we believe current multiple year trends in Brooklyn significantly mitigate these risks
– Real estate markets are regional, and therefore while the pattern of recovery may be uneven across the country, we believe Brooklyn presents the most significant regional opportunity for investors and developers alike.
– Our focus on neighborhoods with a proven track record lends itself well to the continued success of our business
– Our documented experience in Brooklyn developments provides us with a strong competitive advantage
– On a project by project basis our projects have delivered returns at the top end of the market
– Any future upturn in macro trends would further support our expectation of favourable growth in our markets
Sources: Prudential Douglas Elliman Real Estate, Brodmore Research