The Midtown-based real estate company RES opened up a storefront last month at 291 5th Avenue between 1st and 2nd streets in Park Slope. The company handles sales, rentals, commercial property and development. While the company has an office near Times Square, this location is its first storefront. As part of its Brooklyn expansion, the brokerage has hired several new agents and is already searching for more locations in the borough. Click through the jump for interior photos. GMAP
Hot on the heels of the New York Times’ story about real estate and gentrification in Crown Heights comes a look at Bed Stuy, where whites have become a noticeable presence and prices of town houses have soared in the last year. (more…)
The median sales price of homes in Brooklyn rose to $575,000 during the second quarter, an all-time record, according to a Douglas Elliman report out today. Homes in Brooklyn now sell for 6.5 percent more than they did at the peak of the last boom in 2007, and 4.5 percent more than the second quarter in 2013. (more…)
A story in The New York Times over the weekend described the rapid gentrification and changes happening in Crown Heights, as longtime residents and businesses move out and are replaced by newcomers. Many businesses have moved to Flatbush, and residents typically move to Flatbush, East New York and Brownsville, according to the story.
Developers such as Realty Within Reach, Hello Living and Brookland Capital, of course, discovered the neighborhood a few years ago, and “more than 1,250 units in about two dozen residential projects” are in the works, mostly west of Nostrand and north of Eastern Parkway, according to the story. While very few are “affordable,” Brookland Capital’s Boaz Gilad explains the appeal of a condo:
“Most of our buyers are people in their late 20s and early 30s who live in the neighborhood already, paying, say, $2,400 a month in a free-market building,” he told the Times. “With an F.H.A. loan or some help from parents or money they’ve saved, the cost of buying the apartment will be maybe $2,600 or $2,700 a month. So there will be no change in monthly costs, but they’re going to own an asset.” (more…)
Average co-op prices in north and northwest Brooklyn have spiked 71 percent since January to $687,000 and the average condo in Brooklyn now costs $1,080,000, according to a report from Ideal Properties. Both DNAinfo and The New York Daily News carried stories on the report, which is not yet available online.
A lack of inventory, especially of townhouses, is driving the increase, said an executive with the firm. Bidding wars are routine in Brooklyn, where inventory in general is lower than in Manhattan, an executive from Warburg Realty told DNAinfo.
As prices of brownstones in “emerging” areas push past the $2,000,000 mark, some flippers are changing how they do business. Out are the low-end, Home Depot-style renovations with 12-inch tan floor tile, country-style wood cabinets, and fake granite counters. In are $30,000 appliance packages, rear walls of windows, and central air.
“As the market changed, the clientele changed. Everything demanded a much higher grade rehab, higher grade finishes, and higher grade bells and whistles. If you’re dealing with $2,000,000 houses, it’s gotta look like $2,000,000 house,” said developer Adam Cohen of Stuyvesant Group. His company has about 20 projects in various stages, including rehabs in Brooklyn and rentals in Harlem.
It was Stuyvesant Group that renovated the narrow but detailed Amzi Hill house at 22 Arlington that reset the record for a townhouse sale in Bed Stuy when it closed at $2,250,000 earlier this month. As noted, the buyer was Australian investment firm Dixon.
One of the agents on the deal, Ban Leow of Halstead, said he expects prices in the area to climb even higher soon, because a group of bigger and renovated properties are about to come on the market. This was a premium house in terms of its details and renovation, but was less than 16 feet wide. Other houses that have recently closed at high prices for what they were in Bed Stuy and Crown Heights were full size with tremendous details but unrenovated. Three of those properties were also purchased by Dixon, as reported.
In Fort Greene, where renovated townhouses generally fetch $3,000,000 and up, Stuyvesant Group is renovating a brownstone to standards more typically seen in high-end custom renovations, including radiant heat on all floors that can be controlled from an iPad, a high-efficiency boiler, and replacing the back wall with glass and steel.
In Bed Stuy or Crown Heights, that renovation would be too expensive, but developers are still taking a high end approach vs. several years ago. “We never did the cheap stuff, it was always custom cabinets, better tile and hardwood flooring,” said Cohen. “We used to give a standard package of stainless steel appliances, and maybe now it’s [a more expensive] appliance package. It used to be quartz counters, now it’s Carrara marble.”
At 22 Arlington, for example, a new kitchen in the rear of the parlor floor, pictured above, has an Italian marble backsplash and center island, Sub Zero refrigerator, Wolf range and vent hood, Bosch dishwasher, a microwave in a drawer and custom made radiator covers. Wall-mounted split A/C units were chosen instead of central air conditioning to avoid unsightly ductwork in the detail-laden house, though Stuyvesant Group does install central air in the houses it gut renovates, said Cohen.
They also repaired all the plasterwork that could be fixed. The arch above where the stove now sits “was cracked into nine different pieces, and we fixed it,” said Cohen. The interior doors are original to the house, but not necessarily in the same places, since the layout was reconfigured. In Fort Greene, there was nothing to save, since the house had a fire so it was a full gut job, but they purchased three vintage pier mirrors and restored the front door (since the house is landmarked). “We try to give it that brownstone look, we don’t want it to have that condo look,” as Cohen put it. “I feel like in this market, if you give buyers something good, they are happy to pay for it. They don’t want to pay for garbage.”
Stuyvesant Group is already in contract on two other nearly finished houses it never even put on the market but struck a deal with buyers who were among the bidders at 22 Arlington, he said.
Buyers are “looking for well-configured homes,” said Leow. A triplex over a garden rental is ideal. They don’t like small galley kitchens but prefer a “very nice open space with lots of countertops where a family can actually enjoy their home and cook for friends.” As for gut jobs vs. preserving original detail, “every buyer who buys a brownstone wants a house full of period details,” said Leow. “If there are details, it would be shameful if someone comes in and rips everything out and throws it in a Dumpster. But sometimes investors buy a shell and there is nothing to salvage.” In that case, buyers “would rather see a high end renovation that will work” for a family, he said.
Problem properties that developers were picking up for $250,000 to $350,000 at the height of the bust and selling for $500,000 to $625,000 once they were renovated are now about $800,000 just for a shell — maybe 5 percent more if they are close to Nostrand Avenue. “Today we would buy them for more than what we sold them for even after rehab,” said Cohen. Another thing that has changed is buyers were highly leveraged before and now they are putting down at least 50 percent cash if not 100 percent. (more…)
Bensonhurst, a middle class Italian enclave for generations, is booming with Chinese immigrants. A similar transformation occurred in Manhattan’s Little Italy decades earlier. Bensonhurst is now officially 36 percent Asian, although informal estimates put it even higher, according to The Wall Street Journal.
Signs for businesses along 73rd and 74th streets reflect the changing demographics. “At the Sciacca Social Club, a large poster celebrates Italy’s 2006 World Cup win, while a few doors down, signs for both the Brooklyn Center for Musical Arts and C&K Art Center are written in both English and Chinese characters,” said the story.
Chinese are increasingly drawn to the area as they are priced out of Sunset Park. Real estate prices in the area are rising, driven “in part” by demand from Chinese buyers, according to brokers interviewed by the Journal. About 13 percent of the locals are Hispanic and 49 percent are white, according to Census data. Interestingly, the Asian influx is fairly recent, with the population “growing 57 percent between 2000 and 2010,” said the Journal.
The median sale price for homes is $699,000, which is 17 percent higher than the median for all of Brooklyn. The commute to midtown is about an hour on the subway.
The quality of life in the neighborhood is good, the streets are clean, and politicians listen to the locals, said the story. A BJ’s Wholesale Club plans to open in mid-September in a new shopping center on Shore Parkway and 24th Avenue.
One development residents are not so happy about, though, is a garbage-processing facility on Shore Parkway. Construction is supposed to start before the fall, and end in mid-2017. Locals say they are concerned about increased pollution from the plant.
Although not mentioned in the story, the area does have some older housing stock, including turn-of-the-last-century brick row houses and early 20th century apartment buildings. Would you consider living in Bensonhurst?
Brooklyn blogger and real estate consultant Jonah Landman of BK to the Fullest and real estate agent Steven Szczur have launched an online real estate matchmaking service for Brooklyn. HomeCanvasr gives members access to secret, off-market listings not available elsewhere and also lets buyers publish what they’re looking for.
The idea for the site came about as a way to automate the service Landman offers his one-on-one clients, who pay $2,000 and up for individual consulting, and also as a place to use all the off-market listings Landman finds. Szczur, a licensed agent who works in New Jersey, was already working on a similar service on his own.
The site, which went live Monday, officially launched today with about 30 listings and 40 buyer members. (Pictured above is a property on the site, a single-family house in Bed Stuy asking $850,000.) Anyone can join and see partial listings, although to see addresses and connect with sellers, members must pay an initial $200 fee plus $50 a month. Buyers fill out a questionnaire that is similar to the “intake” screening Landman uses with his clients. In addition to the obvious questions about housing type, neighborhood, and price range, it also asks buyers what they have purchased before, what they will compromise on, and what is a must-have.
Landman gets his listings from brokers who hope to find a buyer without an agent so they don’t have to split the commission and from property owners he calls “sell-curious.” The plan is to expand to Manhattan and then to other cities where demand is intense but inventory is scarce, such as San Francisco and D.C., said Szczur.
As readers here may recall, Seth Weissman of Weissman Equities has been buying up and renovating mixed-use buildings in east Bed Stuy with a goal toward revitalizing the neighborhood by bringing new retail into long-empty spaces, much as his firm did in the Pines on Fire Island. Now he’s created an investment company called CityShares whose first fund will be focused on Bed Stuy specifically, he told us.
To advertise the fund, he’s created a video about Bed Stuy that features local residents and business owners Brownstoner readers will recognize, including cafe owner Superfrench, Halstead agent and preservationist Morgan Munsey, and Seasons garden center owner Deborah Young. Small-time investors with $100,000 or more to invest can buy shares in the $5 million fund, which he will use to buy properties.
The fund is officially launching this week, and will close in July. Weissman already has about 20 investors, he said. Once the money is in place, CityShares will use it to buy eight to 10 buildings in the neighborhood, both mixed-use and multifamily. The focus will on cash flow from rent and improving cash flow by making improvements over time, he said. (more…)
This week we have received notice of not one but two panels on gentrification and real estate in Brooklyn. After a year of rapid price escalation in Brooklyn, “housing matters are on the minds of all Brooklyn residents,” said the Rev. John E. Denaro, Rector of St. Ann & the Holy Trinity Church, which is hosting one of the events. “We are pleased to explore this urgent topic with guests who are asking the hard questions about the future of our beloved borough.”
The first event, hosted by two Corcoran agents, is specifically focused on Bed Stuy and has some very heavy hitters planned for the lineup. Brooklyn Borough President Eric Adams will speak. Columbia professor of Urban Planning Lance Freeman will keynote. If you have read anything about gentrification, you will know Freeman has published what may be the definitive work on the topic, “There Goes the Hood: Views of Gentrification from the Ground Up,” an ethnographic study of gentrification in Clinton Hill and Harlem that outlines the good and the bad effects of gentrification through interviews with long-term residents of both neighborhoods. He is most famous for a study that showed people move in and out of poor neighborhoods as often as they do in gentrifying ones.
Panelists include President and CEO of Bridge Street Development Corp. Emilio Dorcely, Community Board 3 Chair Tremaine Wright, Council Member Robert Cornegy, Richard Flateau of Flateau Realty Corp. and Brownstoners of Bedford-Stuyvesant President Ava Barnett. The event will “explore current trends and future growth possibilities” in Bed Stuy “and how the public can benefit from these new opportunities,” said the email.
It will take place Saturday, June 21, from 9 am to noon at the Nazarene Congregational Church at 506 MacDonough Street. Breakfast will be served. Seating is limited so please RSVP to 718-765-3732 or email@example.com before June 19.
The second panel, “Brooklyn Housing Matters: Tackling Affordability,” is billed as a “public forum on housing issues, initiatives and prospects.” Hosted by The Forum @ St. Ann’s, the panel will be moderated by New York Public Radio urban policy reporter Cindy Rodriguez. Panelists include Council Member Stephen Levin; Caitlyn Brazil, VP of Strategic Partnerships of CAMBA, a housing nonprofit; and Aaron Koffman, Director of Affordable Housing for developer Hudson Companies.
The panel will explore how Brooklyn “can preserve the qualities and diversity that make it distinct, as the borough develops as an epicenter of world culture,” said the email we received. “Brooklyn’s special character, cultural vibrancy, and quality of life have attracted global attention. With it has come dramatic and rapid change. Residents are seeing their neighborhoods change so fast that they hardly recognize their surroundings, often cannot benefit from improvements and feel shut out or alienated on their own turf. What are we losing in the process? The key to it all is housing. As New York’s new mayor and developers pursue common ground on conflicting housing priorities, retaining the rich flavor and uniqueness of Brooklyn will be challenging.”
Panelists will cover “the definition of affordability…the housing needs and prospects of those who are evicted, foreclosed, displaced, unemployed, elderly or disabled, how to honor the character of neighborhoods marked for development, and how to retain community cohesion while gentrification significantly alters the traditional resident profile.”
The community forum takes place Thursday, June 24 at 7 pm at St. Ann’s the Holy Trinity Church in Brooklyn Heights. For more information, check out St. Ann’s event page.
The rent vs. buy equation has changed again in places like Brooklyn, where home prices are now so high it might make more sense to rent, according to a story in The New York Times. In fact, the market turnaround may show we’re in a bubble that is going to crash soon, the story said:
An analysis by The New York Times finds that in the country’s most expensive places, including New York, the San Francisco Bay Area and Los Angeles, buying a home again looks like a perilous investment, based on the relationship between their prices and rents or incomes. And in a longer list of areas, including Boston, Miami and Washington, prices have risen enough that buying is no longer the bargain it looked to be a few years ago.
…But across much of California and the Northeast, prices are now high enough that the costs of owning a home – property taxes, repairs, fees to real-estate agents and mortgage interest – may outweigh the financial benefits, including the tax break.
It is the latest change in a yo-yo pattern over the past decade. From 2004 to 2006, the math overwhelmingly favored renting rather than buying across most of the country, even as many Americans mistakenly decided that home prices could never fall. From 2009 to 2011, buying was an extraordinary deal in most of the country. Even the markets that have experienced huge price increases are far from the clear-cut bubble conditions of the mid-2000s, but they’re inching closer with every bidding war.
This viewpoint comes as a surprise to us: Even as housing prices in Brooklyn have risen steeply in the last six months or so, so have rents — or so it seems to us.
But an analyst at Moody’s sees it differently: “A lot of these coastal markets look overvalued compared to rents. In these markets, it seems generally more attractive to rent than to buy, even as the national market is broadly well balanced.”
If you are considering a house that costs $500,000, it might make more sense to rent if a similar place is available for $1,956 a month or less, said the Times. Do you agree?
Today Williamsburg has just barely edged out Dumbo from its longtime perch as the most expensive neighborhood in Brooklyn, according to our market stats. The average price per square foot in Williamsburg is $1,133, vs. Dumbo’s $1,132. Though today Vinegar Hill actually takes the crown at $1,193 per square foot, although with only 10 listings.
We believe the reason Williamsburg is neck and neck with Dumbo is that it has an increasing number of large units for sale, and the price of these is also increasing. Note these stats are for asking prices, not closed sales. They are for all types of properties.