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May 31, 2010
Price drops at On Prospect Park provide another reason to doubt KPMG report on housing market
Atlantic Yard Report
New information gives even more reason to question the KPMG report for the Empire State Development Corporation (ESDC) on the housing market in Brooklyn, a report that asserted that there was sufficient demand for the planned Atlantic Yards luxury condos for the entire project to be completed in the announced decade.
So far, judges have deferred to the ESDC's "experts," but the expert is not very reliable.
Remember, KPMG last August 31 claimed that Richard Meier's On Prospect Park was 75% sold; however, the New York Times quoted the developers as saying half the units have been sold and that StreetEasy.com documented only 25% the units as sales.
Now, the developer counts 54 units sold, with--after the consolidation of some units to make larger apartments--42 yet unsold, according to a New York Times Real Estate section article headlined Larger Units for a Richard Meier Condo.
That's still way under 75%. (StreetEasy counts 38 recorded sales.)
Prices going down
Moreover, the prices for On Prospect Park are likely much lower than assumed in the KPMG report. The Times reports:
To get the building’s original buyers — some of whom had put down deposits in early 2008 — to close on their apartments, Mr. [Louis] Greco [of developer SDS Procida] said, he had to deduct 15 or 20 percent from the agreed-upon prices...
Mr. Greco said that 42 apartments remained to be sold, at prices starting from about $680,000 to $5 million; per square foot, the prices are about 28 percent lower than in 2008.
NoLandGrab: Long story short — Brooklyn needs a real estate bubble unlike anything we've seen over the past decade to make the Atlantic Yards numbers work.
Posted by eric at May 31, 2010 9:24 AM