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.
An unnamed real estate firm is setting up shop at 11 Greene Avenue, a worker inside told us when we stopped by recently. This is in one of the 19th century storefronts in three Italianate row houses near the intersection of Fulton Street in Fort Greene.
Unfortunately, the new cement window surround looks out of place, but at least it didn’t replace anything historic. The retail space, previously the longtime home of Jessy’s House of Styles unisex salon and barbershop, had a modern metal facade. GMAP
Update: A Corcoran spokesperson just confirmed this will be Corcoran’s sales office for the Lefferts Place Mews condos in Clinton Hill.
Hey, look, here on October 25, 2004, we predicted the coming crash! OK, well, the post, titled “It’s All About the Interest Rates, Stupid,” was actually a reblog of a New York Times story that predicted the coming crash. Still.
The real problem lurking below the surface of the real estate market, according to The New York Times, is the large number of the adjustable rate mortgages (ARMs) and interest-only loans that people have taken over the past couple of years to enable them to afford the monthly payments on the increasingly expensive homes they are buying. If rates do rise a few percentage points over the next couple of years, a lot of these folks could find themselves unable to make their payments. But The Donald isn’t too worried: “I just don’t think that the politicians can allow the rates to go up because then the economy beyond real estate will tank.”
It’s cheaper to buy than to rent in 94 of the top 100 largest metro areas in the U.S., according to a report from Zillow quoted in a story in Business Insider. Renters spend 29.5 percent of income on rent, on average, vs. only 15.3 percent of income home owners spend on mortgages. (The comparison doesn’t seem to take into consideration repairs, heat, insurance and other costs — or the homeowner’s tax deduction either.) (more…)
Greenpoint has a charming old-world European feel, as anyone who has visited its Polish grocery stores knows, but house prices have moved into the stratosphere in the last two years, despite new apartment developments. A look at the area in the Times real estate section yesterday started off with a slightly misleading anecdote about a couple who almost gave up but then found their dream house there – in 2011.
Prices for two and three family row houses, most clad in vinyl siding and often in need of renovation, have risen from $750,000 to $850,000 in 2012 to $1,300,000 to $2,000,000 today, according to the story. The story also described other amenities in the area, including “destination restaurants” — and the ever-popular “destination” donut maker, Peter Pan — as well parks and schools.
The coming of 5,500 new units over 22 acres at Greenpoint Landing was noted briefly in passing without additional comment. Notably, the story did not mention “Girls.”
A dramatic surge in sale prices and rents is causing change and displacement at a head-spinning pace in Crown Heights, Bed Stuy, Bushwick and other neighborhoods in Brooklyn, according to a story in Bloomberg. Buyers with more than a million to spend are choosing to buy whole houses in Crown Heights and similar neighborhoods rather than cramped apartments elsewhere. The story said:
Young buyers and renters who can no longer afford such established communities as Fort Greene, Park Slope and Williamsburg are moving to Crown Heights, Bedford Stuyvesant and Bushwick, bidding against investors for townhomes that have been neglected for decades. Longtime tenants too poor to afford the new rents in the predominantly black districts are moving out to less-well connected, more dangerous places.
We were particularly struck by this stark — and potentially depressing, depending on your situation — description of the wealth now required to buy in much of Brooklyn:
Families with children are increasingly choosing to stay in New York City and if they don’t have millions to spend, their options are limited, said Kathleen Perkins, a Realtor at Douglas Elliman Real Estate who helped the Katzes find their Crown Heights townhouse. “My cheapest house for sale in Fort Greene/Clinton Hill is $2,500,000,” Perkins said. “If you have $1,500,000 and you’re my client, I’m driving you to Bed Stuy or Crown Heights.”
The story is pitch-perfect, in our opinion, in its overview of what is happening here and why, even though none of it will be news to regular readers of Brownstoner. Does it ring true to you?
This weekend The New York Times real estate section looked at people who are finding themselves priced out of Brooklyn. No doubt this has been going on for ages, but the story points to some pricing trends that show that real estate in Brooklyn, or at least in the most expensive north and western neighborhoods (from Red Hook north to Greenpoint and Gowanus and Park Slope) is quickly accelerating towards Manhattan pricing, particularly since the financial crisis in 2008.
According to the story, in the second quarter of this year there were 107 sales over $2 million in these neighborhoods, more than any other quarter. Since 2008 the median sales price has inched 33 percent closer to the median sales price in Manhattan–now $575,000 in Brooklyn versus $910,000 in Manhattan. Five years ago median rental price in these parts of Brooklyn was $1,030 cheaper than in Manhattan. Now it is only $353 cheaper. (more…)
This Romanesque Revival home and former House of the Day at 66 Midwood Street has just sold for $2,300,000, beating the neighborhood record for Prospect Lefferts Gardens by $450,000. The landmarked five-bedroom, five-bath house hit the market in March for $1,975,00. The 1898 townhouse is dripping with original details, including ornate wooden mantles, dressing rooms and four functioning fireplaces. It hit the public records last week. Its sale price blew through the previous record of $1,850,000, set by Dixon with its purchase of 36 Rutland Road in January.
The creme de la creme of Brooklyn listings is clotted. The handful of Brooklyn properties at the very top of the market, asking between $10,000,000 and $16,000,000 and sometimes more, aren’t moving. There’s a multi-million-dollar gap between asking and closing prices at the tippy top of the Brooklyn market.
The Real Deal took a look at the top 10 Brooklyn listing prices and the top 10 Brooklyn closed sales, and found a discrepancy. Since 70 Willow Place — where Truman Capote famously rented — closed for $12,500,000 in 2012, several higher priced properties have failed to sell, and it remains the borough record. (more…)
Not all Brooklyn neighborhoods are equal: The much-vaunted inventory shortage is easing off in some areas while it’s only getting worse in others. Inventory in Red Hook, Prospect Lefferts Gardens, Prospect Heights and Park Slope decreased the most in the last year, according to a detailed and fascinating look at Brooklyn real estate in The Real Deal. Guess where inventory is actually increasing?
Bushwick and Bed Stuy led the pack, with whopping increases of 45.5 percent and 41.5 percent in inventory over the last year. (more…)