More New-Development Condos Doing Nothing to Dampen Prices

The Brooklyn building boom has finally unleashed a slew of new-development condos: The total number of new-development sponsor sales throughout Brooklyn shot up a whopping 84.5 percent in the second quarter vs. the first. Median sales prices for new-development condos increased 19 percent, while the median per square foot jumped 24 percent in the period, according to a report out Friday from real estate firm MNS.

No neighborhood is hotter than Williamsburg, where the median sales price for new developments shot up 52 percent, from $821 per square foot to $1,244 per square foot in the second quarter vs. the quarter before, as DNAinfo was the first to report. The median sale price for a new-development condo in Williamsburg is now $1,770,000.

Lots more inventory is coming online, with an amazing 48 condo buildings currently in development in Williamsburg right now, according to MNS. But more inventory probably won’t do anything to dampen prices there, according to the firm.

New condos in Williamsburg “will continue to see high growth margins throughout the rest of the year and the next,” predicted the report. “Williamsburg is the hottest neighborhood in the hottest borough in New York, which is the hottest city to be in,” an MNS exec told DNAinfo. “It’s the triple whammy. It’s only going to get higher.”

Williamsburg New Property Prices Jump 52 Percent in 3 Months, Report Says [DNAinfo]

15 Comment

  • When everything being built is a luxury development, of course prices are going to go up. The whole idea that adding more inventory would lower prices overall- who came up with that notion? Maybe if developments were being built with the average person in mind, but that was never the case. The current boom has nothing to do with filling a need for more housing.

  • The thing is, practically nothing is still being built. We can talk about “84.5% increases” all you want, but in a borough of over 2.5 million people, a few thousand housing units a year one way or another might as well be zero. Until the number of units being built is approaching maybe 50,000/year (at the low end), of course you can’t expect slight increases in construction to make a difference.

  • I just wish luxury housing was actually luxurious. Most of this crap isn’t as nice as the railroad apartments it replaced.

  • Well, yeah. These developments aren’t being built to alleviate the housing shortage. They’re being built to attract luxury buyers, a lot of them probably from Manhattan and looking to get a little more bang for their buck. It’s not like they’re building housing for the average Brooklyn family.

  • The word “luxury” is simply a buzz word used for marketing purposes used very loosely, (similar to “chef’s kitchen”) But the true definition of the luxury market in new development, according to Jonathan Miller and most brokerage firms when calculating market analysis is defined by a new product priced at 3 million or more. If you read a report that sets the “Luxury Market” aside from the rest of the market, this is what they are referring to. So far, I have only seen that term technically used when referencing the Manhattan markets, as there is very few Brooklyn apartments that would sell that high in Brooklyn, as opposed to Manhattan, where that would be the entry point to purchase in most new development.

  • Pretty sure that the term “luxury” applied to outer borough rentals is simple code for “just-expensive-enough-that-you-can-be-sure-you’ll-only-be-meeting-people-just-like-you-in-the-hallways”. ie. Most assuredly different from the walk-up that’s more attractively priced but might expose you to, well, stuff you might not want to be exposed to.

    • And, you know, is a walk-up, doesn’t have a washer-drier or a dishwasher or a doorman or air conditioning. There are a lot of conveniences that are simply absent in older buildings–that’s why they’re cheaper, not because the wealthy don’t want to rub elbows with the poor. (Now, there’s a little bit of that, but it’s way overblown.)

      • true to a degree, but much of what gets billed today as “luxury” turns out to (a) not have a doorman (b) not have laundry in the unit (c) has a built-in PTAC or equivalent which ain the same as Central Air, and sometimes mean you’re on the hook for electric heat all winter. And hey, those crumbly prewars usually have an elevator…

        • This. Luxury to me is a formal dining room, not a ptac unit.

        • Sometimes, yes. But usually not. And those that do lack such amenities tend to be in neighborhoods where you’d struggle to find a pre-war that’s been renovated since 1970 anyway, at least right now.

          And PTACs aren’t great, but they are far, far better than window air conditioners (much more so than central air is better than PTACs).

          • I’m not an expert on building buildings, but it occurs to me that providing a hole in the wall to place a ptac and a plug to plug it into is not very expensive to build when compared to adding an actual heating or cooling system. One wonders, seeing buildings with only this, what other corners have been cut in the construction.

            Also, having lived with both ptac units and window ac, I disagree: my window ac units did not break, cost me a lot less to use. Also, radiators are so much better than ptac for heating that there’s no comparison.

  • That’s a picture of a new rental tower.

  • went to the crowded first open house on sunday for a new, as yet unfinished condo development in the burg… awkward layouts, low ceilings and construction quality was below average (even relative to shoddy peers). brokers already emailed everyone who signed in demanding best and finals for all available units by noon on thursday.