Brooklyn Home Sales Drop 44% as Banks Tighten Lending

Brooklyn apartment and townhouse sales fell 44 percent in the second quarter from a year earlier and prices dropped 1.9 percent as buyers struggled to obtain mortgages from banks battered by the credit crisis.

(Bloomberg) -- The median sales price declined to $525,000 from $535,000 in New York City's most populous borough. The number of sales fell to 2,031 from 3,601, Prudential Douglas Elliman Real Estate and property appraiser Miller Samuel Inc. said in a report today.

"The pattern that we're seeing is a lower level of activity, with prices overall moving sideways,'' Miller Samuel Inc. President Jonathan Miller said in a telephone interview.

Six out of every 10 banks raised standards for home loans to their most creditworthy borrowers in the first quarter, according to a Federal Reserve survey of senior loan officers. The property market in New York City is also slowing as financial firms cut almost 90,000 jobs after taking more than $400 billion in mortgage-related losses and writedowns.

New York City's market is starting to show signs of the national slump started in 2005. Manhattan apartment sales dropped the most for a second quarter since 1998 and unsold inventory approached an eight-year record, Prudential and Miller Samuel said in a report released on July 2.

The Miller Samuel-Douglas Elliman second-quarter Brooklyn market report (PDF).