Bed Stuy Is Booming
Bed Stuy has been having a year or two of “record growth,” both in prices and volume of deals, said a story in real estate trade pub The Real Deal. Upward prices and lots of construction in the neighborhood “are signs that record growth could continue.” The story’s headline is “Betting on the Bed Stuy…
Bed Stuy has been having a year or two of “record growth,” both in prices and volume of deals, said a story in real estate trade pub The Real Deal. Upward prices and lots of construction in the neighborhood “are signs that record growth could continue.” The story’s headline is “Betting on the Bed Stuy Boom.”
What is happening in Bed Stuy mirrors much of the rest of Brooklyn, where deals are setting new price records and the number of deals is rising.
While acknowledging Bed Stuy’s special architecture, a “wealth of highly detailed brownstones,” the story also mentioned “limestone row houses,” which do exist but are more typical of Crown Heights, and focused on condos, which at least for now make up a very small proportion of the housing in the area. As an example of Bed Stuy’s record setting prices, the article cited “condos that top $1 million” (a record set in June 2013) rather than row houses that cost $3 million (last week).
The story spoke with five real estate agents, all of whom said condo prices — now $500 to $700 a square foot — have nowhere to go but up. They also said a floor-through in a 20 by 45 foot building will run about $1,900 a month and two-bedroom apartments are now going for just under $2,400 a month. Prices of typical townhouses were in the $900,000 range three years ago and now range from $1,000,000 to $1,500,000. Meanwhile, as prices soar, the quality of flips is improving, as we have also noted in past stories.
Here are a few choice quotes:
“The most desirable products on the market are brownstones and limestone buildings with two to four units. There are very few available, and this lack of inventory tends to inflate the price in most of Bedford Stuyvesant.” (Alain da Sylveira, salesperson, Fillmore Real Estate)
“The high quality of renovation seen in recent months by short-term investors has reversed completely the idea that quality could not be part of a successful flip. Exceptional products and great design are being offered to buyers.” (da Sylveira)
“As prices inch up, more and more properties will come on the market. Property owners that have lived here for many, many years are cashing in.” (Ban Leow, salesperson, Halstead Property)
“The number of sales of multi-family homes have increased nearly 30 percent compared to last year. The number of condos is about the same, because much of the multi-family properties and land that was purchased is still being renovated and converted into condos. I think the number of condo sales will increase dramatically by this time next year.” (Stephanie O’Brien, associate broker, Douglas Elliman)
So, to summarize, the market will be flooded with new condos soon. What do you predict will happen with townhouse prices — flatline, up or down?
Betting on the Bed Stuy Boom [TRD]
Rents are continuing to move up, unfortunately. This is still giving the incentive for people to become homeowners. Especially those from higher rental areas like Manhattan and buy in Brooklyn, especially in Bed-Stuy and other nice Brooklyn neighborhoods.
If in 2015 rents stabilize and interest rates flatline, then maybe the demand for ownership will slow down.
What’s funny is that historically, when Interest Rates start to move up, the beginning part of that movement will be a panic buying scenario where people want to buy before they miss out on the incredibly low rates.
It may not be until 2016 before that panic mentality stops.
Anyway, just my thoughts.
The best homes on the best blocks in BedStuy will continue to fetch these numbers and then some, but like any location when the down turn comes (and it will) Bedstuy will not be immune.
I’m still seeing a lot of houses sitting for months and not only in Bed Stuy.
I think high quality homes like the Clifton Place house from a few weeks back will command top dollar. But the so-so and unfinished homes are sitting.
I completely agree with you. I’m seeing the same in Bushwick. A lot of headlines coming across on record breaking sales prices in BedStuy but this only impacts the high end of the housing stock which distorts the market perception for those reading the news. The middle tier and smaller brownstones/townhouses have been sitting on the market for months and have been recently seeing some small price cuts from previously aggressive asking prices.
I think the market will flatten in 2015, if not take a slight dip lower. I think a lot of the previous owners that are “cashing in” will accelerate in 2015. It takes at least a couple years for many of these owners to make arrangements with their lives to sell and will start to see a lot of inventory on brownstones that need serious renovations but only few willing to do so. Developers will try and low ball offers for them and legacy owners will only scoff at their offers and as supply increases there will be downward price pressure on these unrenovated homes. As many of the distressed properties have been scooped up already and flipped to begin with there will be little left. Furthermore, the US dollar has had major strength against many of the other major currencies the past few months (up 10-20% against most ones) and this will discourage many of the international investors looking for cheap opportunities in the US (Dixon perhaps?). I think with these factors combined we will see things flatline and possibly take slight dip in 2015. The only hopes of taking another leg up in prices is if mortgages become more accessible for first time home buyers that can get renovation loans without a hefty downpayment as many of the previous plans like the low downpayment FHA renovation loans are now unavailable due to current home prices. I purchased my townhouse in Bushwick not long ago and would hope for a market dip so i can buy a second one!