Check out this New York Times video about Bed Stuy, the first in a new monthly series, “Block by Block,” about what it’s like to live in various New York City neighborhoods. We recognize lots of friends and neighbors in the piece.
It covers a lot of ground, including Bed Stuy’s heritage, beautiful brownstones, distinguished residents such as the late Shirley Chisholm, rapidly escalating rents, crime and Bed Stuy’s family-friendly environment. We recognize Peaches, Scratchbread, Bed Stuy Fish Fry and lots of other local businesses.
Brownstoner commenter and real estate agent and preservationist Morgan Munsey, Georges-Andre Vintage Cafe owner Karine Petitnicolas (aka SuperFrench), and Eduardo Mantelli of Saraghina all have cameos — as do many others. What do you think of it?
Just a quick update to let you know Mipam Thurman, Uma Thurman’s brother, did decide to join Halstead. He started in the Bed Stuy office, pictured above, in late November. (As you may recall, he decided to switch professions from digital advertising to real estate after a grueling two-and-a-half-year search for a house that started in Bed Stuy and ended in East Flatbush.)
The Bed Stuy office has been growing like crazy since it opened just over a year ago. In addition to the founding three agents — Donna Myrie, Morgan Munsey and Ban Leow — the group has added 17 more, for a total of 20 working out of 316 Stuyvesant Avenue in Stuy Heights.
More sales and rental reports were released this week, and while no two are exactly alike, they all show what we have been hearing: Closed sales and asking rents rose in Brooklyn in 2014, and the gains were dramatic in areas such as Crown Heights, Prospect Lefferts Gardens, Bushwick and Bed Stuy.
As Frank Percesepe, Corcoran’s senior regional vice president for Brooklyn put it to The Real Deal: “It’s not like people just started to buy in Bed Stuy. But this year was amazing…The prices catapulted.”
Overall, Brooklyn sales were at a record high, with median sales increasing 2.6 percent to $585,000 and average sales increasing 9.9 percent to $756,569, vs. the year earlier, according to Douglas Elliman.
Condo supply continues to be limited (new development comprised only 10 percent of sales during the 4th quarter, according to Corcoran). “This is driving large price increase in the resale condo market, particularly in recently constructed buildings” in northwest and north Brooklyn, where average condo price per square foot shot up 23 percent and 15 percent, respectively, said Corcoran’s report. “But the largest increases are occurring further afield as lack of supply has buyers expanding their searches. The neighborhoods just south of Prospect Park had a 36 percent increase in average condo price per square foot, while Bed Stuy/Crown Heights rose 64 percent.”
Overall, gains on the rental front were modest, with average asking rents increasing 3.08 percent since 2013, to $2,666.08, according to MNS. But increases in some neighborhoods were astonishing, with Boerum Hill up 15.7 percent for the year, for example.
Anyone looking to buy a townhouse for under $1,000,000 will get the best bang for the buck in East Flatbush, although they should also check out Bushwick, Bed Stuy and PLG, a real estate agent advised us last night at dinner.
Now this morning DNAinfo has a story saying the time is now to buy a recently renovated townhouse in a “hot” neighborhood for under $1,000,000 – but those opportunities will soon be fading. The areas in question are Bed Stuy, Bushwick, Crown Heights and Prospect Lefferts Gardens.
“Soon” — it’s unclear exactly how soon — townhouse buyers will be priced out of those areas and relegated to Ocean Hill and East Flatbush, said the story, citing our own posts about recent record-setting sales in Crown Heights ($2,900,000) and Bed Stuy ($3,000,000).
The story also quoted a sales report out from the Real Estate Board of New York yesterday. In the fourth quarter, condos were up 13 percent and townhouses were up 17 percent throughout all of Brooklyn, vs the year earlier, said the report. The gains for townhouses in specific neighborhoods are nothing short of astonishing. Said DNA:
Bed Stuy one- to three-family homes, for example, sold for an average price of $887,000 in the fourth quarter of 2014, up 37 percent from the year before, according to a report released Tuesday from the Real Estate Board of New York. Crown Heights homes went for an average of $733,000, up 24 percent over the year. Bushwick homes averaged $633,000, up 35 percent, and Prospect Lefferts homes averaged $673,000, up 16 percent.
Soon the action will turn to condos, as a huge number of new condo buildings are set to launch in these areas, as we’ve reported previously. More specifically, Aptsandlofts.com alone is “representing 40 new buildings slated to open this year and next in areas like Bushwick, Bed Stuy and Crown Heights,” said DNA.
Another agent, Ban Leow of Halstead, recently told us he believes the market will continue to climb for another three years. What do you think?
A local investor has been buying up properties on 4th Avenue between 15th and 16th Streets in South Slope, which could mean a new megadevelopment is coming to the block. One More Folded Sunset noticed that six buildings on the east side of the avenue have recently changed hands. The sale of 549 4th Avenue last month, for $2,250,000, filled in the last gap in a contiguous run from 543 to 553 4th Avenue.
The blog wondered if more buildings in the row might be next, particularly No. 541, on the corner of 15th Street, which has an interesting old ad for Uneeda Biscuits still faintly visible on its brick. All of the properties are typical 20-foot-wide, three-family apartment buildings with storefronts. We don’t see any demolition permits yet.
The buyer is an LLC with an address on Manhattan Avenue in Greenpoint. Anshel Fridman of Nalcorp Investment Group is the managing member, according to deeds and mortgage documents.
A narrow three-story house at 537 Hancock Street in Bed Stuy, pictured above, with a foreclosure judgement against it of $334,279, sold for $900,000 at auction in December.
A three-story three-family house at 284 Schaefer Street in Bushwick, closed for $910,000 that month. Close to the cemetery and apparently built in the early 20th century, the house had a lien of $10,702.
Townhouses in Bed Stuy, Crown Heights, Bushwick that would have sold for $200,000 or $300,000 in 2011 are now going for $600,000 to $900,000 at auction — tripling in four years. (That is for average houses, usually three stories and about 3,000 square feet.) The prices of large commercial properties have also risen.
Prices started to skyrocket at the end of 2012. By 2014, auction prices of many properties drew close to market rate prices, with little to no discount.
One reason, according to one auction veteran we spoke with, is the pool of buyers is increasing, because online info makes the auctions easier to find.
“New investors plus end buyers coupled with the recent steep increase in Brooklyn property values has made getting something cheap at the auction almost impossible,” Mordy Getz of Transition Acquisitions told us. The Williamsburg-based company specializes in acquiring and improving distressed residential and retail buildings in New York City.
“Once upon a time, auctions were a place for sophisticated investors,” he said. “Investors had to physically go down to the county clerk and search newspapers for upcoming auctions. There are two asset classes at auctions: Townhouses and investment properties. The fact that only sophisticated investors attended caused the price of both assets to be very cheap at auctions. With the Internet age more and more people easily find the info thereby increasing the pool of buyers. That in itself is pushing up the prices.”
He continued: “This public info has even brought some end buyers into the game for townhouses. End buyers always pay a premium, more than investors/flippers. That has caused townhouses to go for full price lately. Investment properties have also become more expensive due to the large pool of investors.”
Considering the properties are purchased blind, with no site visit or tenant info available, “it’s crazy that auction prices became so high,” he said. “Add the adrenaline rush one gets from bidding — and you have a bunch of drunk bidders,” he said, speaking metaphorically.
The average sale price of all kinds of homes in North and Northwest Brooklyn rose 32 percent in 2014, compared to the year before, to $1,282,000, according to a report out today from Ideal Properties. The median sale price increased 12.4 percent to $950,000 in the year.
On a per square foot basis, a more reliable indicator of price fluctuations, average price rose 24.4 percent to $919. The median price per square foot rose 18.3 percent to $910.
Townhouses in particular soared in price, with the average sale price rising 46.5 percent to $2,649,000. Co-ops were up 30.7 percent to $744,257, and condos rose 27.9 percent to $1,120,000, the report said.
More than half, or 54 percent of all homes sold above asking; 33 percent sold below, and 13 percent sold at ask.
Neighborhoods surveyed included Williamsburg, the Navy Yard and Greenpoint, Boerum Hill, Brooklyn Heights, Carroll, Gardens, Clinton Hill, Cobble Hill, Park Slope, Prospect Heights, Windsor Terrace, the Columbia Waterfront District, Dumbo, Fort Greene, Gowanus, Red Hook, Vinegar Hill and parts of Downtown.
These areas of Brooklyn accounted for 31 percent of all sales in the borough, said the report. East Brooklyn made up 17 percent of sales, and southern Brooklyn accounted for the bulk, or 52 percent.
YIMBY has boldly predicted no real estate bust will occur until “the end of the decade.” YIMBY said: “We don’t expect to see a slowdown in gentrification…For better or for worse, we see 2015 shaping up a lot like 2014 but on steroids, with the current cycle having a few more years to run before petering out and turning to bust towards the end of the decade.”
We disagree; if there is a national real estate crash — perhaps brought on by the flameout of a large REIT — Brooklyn will crash too; if interest rates rise significantly, prices will decline. Those somewhat unpredictable events will be counterbalanced by demand in Brooklyn, which will continue. So absent a real-estate market implosion or rising interest rates, we believe, Brooklyn prices will keep on climbing, just like they have in Manhattan. Eventually, though, growth may slow.
Overall, YIMBY predicted recent trends will continue:
But we do expect to see trends that started over the past few years continue, as the city’s prime core, gentrifying fringe, and outer ring of immigrant growth and white flight all press forward in the face of minimal new supply.
In specific neighborhoods, YIMBY said:
To the south, we expect to see Flatbush, Sunset Park, and Kensington emerge as fast-gentrifying neighborhoods — Flatbush as the new Prospect Lefferts Gardens, Sunset Park as the new South Slope and Greenwood Heights, and Kensington as the new Windsor Terrace. Tension over growth should be most pronounced in Flatbush, where zoning is loosest — while we expect Hello Living’s 23-story tower at 1580 Nostrand, practically in East Flatbush, to have the same stellar design and affordable prices as Eli Karp’s other projects, we also see it riling up the left-leaning elements of Flatbush proper, much as 626 Flatbush Avenue did in Prospect Lefferts Gardens.
A look back at the biggest stories of 2014, in no particular order:
1. Property prices and rents continue to climb and surpass the highs of 2007, with prices in “prime” Brooklyn now exceeding $1,000 per square foot. The Pierhouse condos in Brooklyn Bridge Park, pictured above, sets records with average prices per square foot (in contract) at $1,850. A four-bedroom penthouse there is in contract for $11,180,000. The median for all types of homes in the borough stands at $587,515 at the end of the third quarter, a 4 percent increase over the year before and a record for Brooklyn, according to Douglas Elliman. It is also 8.8 percent above the high before the financial crisis — and Brooklyn is the only borough where sale prices are now higher than they were before the crash. At the same time, a lot of high priced houses (asking over $10,000,000) FAIL to sell. (Truman Capote’s old rental, 70 Willow Street, continues to hold the record for priciest townhouse at $12,500,000, set in 2012.)
2. The price gap between “emerging” and “prime” Brooklyn narrows. A narrow but nicely renovated house at 242 Gates Avenue in Bed Stuy, not far from the Clinton Hill border at Classon, sells for $3,000,000, topping the previous record of $2,250,000 (22 Arlington) by $750,000, while equivalent townhouses in Park Slope continue to sell for between $3,000,000 and $4,000,000. The median sale price of a townhouse in Crown Heights, Bed Stuy, Prospect Lefferts Gardens and Bushwick leaps 86 percent in one year to $1,850,000, according to a third quarter market report from Corcoran.
3. The construction boom that took off last year advances to Bed Stuy, Bushwick, PLG, and Flatbush. Brookland Capital leads the pack — in sheer number of projects with more than 40 in the pipeline. Walks through Bushwick over the summer and fall reveals two or three construction or renovation projects on just about every block.
4. National retailers and other big firms replace mom and pops in Williamsburg. Apple finally inks a lease for its first Brooklyn outpost, on Bedford Avenue. Starbucks, J.Crew, Madewell, Urban Outfitters open; Dumont, Moon River Chattel, and Northside Pharmacy close. Glasslands and Death by Audio prepare for their last shows. (more…)
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. (more…)
Brooklyn is the “least affordable” home market in the country, followed by San Francisco and Manhattan, in that order. “A resident would need to devote 98 percent of the median income to afford the payment on a median-priced home of $615,000,” reported Bloomberg News.
The story made headlines and confirmed what many of us living here already suspected.
The affordability problem is part of a bigger trend where “one in five U.S. housing markets are now less affordable than their historic average,” said Bloomberg, as housing prices keep climbing even while income stagnates.
Real estate investors and foreign buyers have been fueling the price gains in parts of the country where housing costs are already high, locking locals into high-priced rentals because they can’t afford to buy, in a vicious cycle, said the story.
Across the country, housing prices are up 25 percent since their February 2012 nadir, according to the S&P/Case-Shiller index.
“Incomes have not grown nearly as fast as home prices,” the story quoted an exec from RealtyTrac as saying. “That disconnected home-price growth has been driven by investors and other cash buyers who aren’t as constrained by income.”
Rents have risen significantly in Brooklyn, where the median rent was $2,858 as of October. That’s an increase of nearly 6 percent vs. the same month a year ago, according to data from Miller Samuel and Douglas Elliman cited in the story.
Of course, comparing the median income of a region to the median house price is only one way to measure affordability. It reflects the variability of incomes in an area as well as home prices.
But even as home prices climb in Brooklyn, across the U.S. they have cooled off slightly in recent months, according to published reports, and quite a few REITS — investor backed real estate investment firms — have in the past year said they are pulling back from buying rental properties or getting out of the rental business in the U.S. altogether.
Not Dixon though! We just heard from Dixon Advisory USA Managing Director and CEO Alan Dixon this morning. He is off to Australia tomorrow to raise another round of funding for company’s next investments here in the tri-state area.
As for prices of townhouses in Brooklyn specifically, they continue to rise, according to the most recently recorded sales. New records were set in both Park Slope and Bed Stuy in recent weeks, as we reported yesterday. We have heard scattered reports of fewer people attending open houses and noticed fewer desirable properties on the market but we guess that’s just the usual seasonal slowdown. So far we’ve seen no sign of actual closed sale prices declining.
A story in Gawker today confirmed the exact addresses of three buildings Vice Media is taking over as it expands its multimedia empire in Williamsburg, and yes, as suspected, Glasslands (as well as Death by Audio and a handful of other businesses) is being displaced. Williamsburg institution Glasslands, a once hidden and illegal performance space that later went legit, announced yesterday its last show will be New Year’s Eve.
The addresses are 285-289 Kent Avenue, pictured above, and two buildings at 49 South 2nd Street. Gawker found mention of the deal and the exact addresses in an interview with the broker that ran in the Commercial Observer in September. When Vice’s expansion was first announced, the exact addresses of the buildings were not given, although we speculated that 285 Kent was one.
It’s nothing new for gentrifiers to displace gentrifiers, and Glasslands is one of a long list of quirky Williamsburg businesses to shut in recent months.