The Queens real estate market remained in a seemingly perpetual state of flux in third quarter of 2012. Prices largely stabilized while the number of sales fluctuated based on geography from the same period a year ago, mirroring continued uncertainty in the broader market brought on by a still-tough credit and economic climate, according to a report by Prudential Douglas Elliman.
“It’s a market that is showing stability more or less in terms of pricing,” said the report’s author, Jonathan Miller of Miller Samuel. “The biggest issue, and this is a growing issue, is the continuing uncertainty among lenders.”
The number of sales in Queens declined 8.5 percent to 2,509 from the same quarter last year, brought down by a substantial drop in southern Queens.
The number of homes put up for sale also declined 12.2 percent to 9,052 units, in comparison to the year-on quarter.
“Inventory continues to fall, and I think that that is a function of credit,” Miller said. “It is not a function of sales being so robust that they’re burning off inventory.”
But market conditions have created the bizarre contrast of falling sales and inventory but average prices increasing by 4.6 percent from the same quarter last year to $417,231. The median sales price, however, fell 3.9 percent to $370,000.
Potential sellers are holding back on selling their current homes and trading up because stricter lending criteria keep them from qualifying for a mortgage, according to Miller, leaving sterling-credited buyers with high equity to fight over a dwindling supply of homes for sale, driving up prices.
“Prices are rising so you assume it’s because the economy is getting better,” he said. “In this case, there’s certainly been a little bit of improvement, but it’s not that the housing market is improving price-wise.”
The Federal Reserve announced in September a third round of quantitative easing, in which the bank buys undesirable bonds from financial institutions in order to loosen the credit market. The move comes on top of rock-bottom interest rates, making borrowing unprecedently cheap.
According to Miller, QE3 had the reverse effect of signaling a rough economy remaining on the horizon, leading most lenders to play it safe.
“Housing is local and credit is national,” he said. “That’s why we’re seeing rising rents, falling inventory across the United States.”
Geographically, southern and western Queens were endemic of the overall mixed bag in the borough. The median price of homes in southern Queens rose 4.8 percent, but the number of sales fell substantially, down 17.9 percent from the same quarter a year earlier.
Western Queens saw home prices remain relatively unchanged, with the number of sales rising 6.6 percent.
Northwest Queens continued to benefit from its proximity to Manhattan as the median sales price increased 3.6 percent to $510,000 while the number of sales also jumped 7.9 percent from the same quarter a year earlier.
Northeast Queens enjoyed a 6.4 percent bump in the median sales price as well as an increase in the number of sales by 6.6 percent from the same quarter in 2011.
Broken down by property type, the condo and co-op markets continued their perpetual rollercoaster ride. The median sales price of condos rose 44.7 percent to $398,000, while the median price of co-ops was unchanged at $195,000.
Despite rising prices, the condo market in Queens cooled substantially, with the number of sales falling 53.1 percent. Conversely, the number of sales in the co-op market jumped by the same amount.
The one-to-three family home market showed the lowest level of fluctuation, with the median sales price rising 3.3 percent and number of sales falling 7.5 percent.