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The Brooklyn market will soon plateau, according to a speaker on a real estate panel, AJ Pires of Alloy, at TerraCRG’s Brooklyn Real Estate Summit Tuesday. That doesn’t necessarily mean we’re in a bubble, although we could be, according to a story in the Commercial Observer. “It feels like 2005 a little bit,” said a different speaker, Roger Fortune of 388 Bridge’s Stahl Organization. “My question is: will it be a hard or soft landing.”

That project was planned to be a condo building, but when financing fell through, the firm turned the building’s base into 80/20 rental housing with condo units on top.

Speakers cautioned developers to avoid problems like that by not borrowing too much, and to invest in high-end amenities. As is well known by now, Brooklyn “is no longer just a value play” for residents, said the panel. “People want to be here because of the lifestyle, not just because it’s cheaper,” said Lightstone Group President Mitchell Hochberg. Since more people who work in Manhattan are now living in Brooklyn, that’s why neighborhoods with the best transportation to Manhattan have changed most quickly, according to the panel.

The panel singled out Gowanus, Red Hook, Bushwick and Greenpoint as the neighborhoods “next in line to progress.” Condo prices have nowhere to go but up, said the panel. Lightstone’s Hochberg said the second phase of the firm’s controversial 700-unit Gowanus development may turn out to be condos after all.

Apartment buildings are going up at a frenzied pace. Do you think demand and financing will keep up? Is this sustainable?

Brooklyn Developers Offer Sage Advice at TerraCRG Summit [NY Observer]


What's Your Take? Leave a Comment

  1. I’ve also been looking over the past year. I agree that much of the pricing and bidding defies logic. A broker recently told me to start looking at 100k under my price range, and overbid on everything by 100k.
    I understand that some people are paying with all cash, which means no inflated adjustable mortgages like 2008, but where does the cash come from? What things are they not buying because they spent this cash on their house?
    What happens when the middle income folks who bought a 2 family on the Eastern edge of Bushwick or Bed-stuy or Cyprus Hills go to rent out the unit and they can’t get a rental income that covers a decent chunk of their mortgage? Does that mean that they are paying more than 36% of their income on their mortgage?
    Western Brooklyn may be frothy and wealthy but after a certain Eastern point, everything is built on folks with low income wages, renting. Low income wages haven’t gone up. Certainly not enough to keep up with real estate.

  2. Bed-stuy is gritty, if living next door to someone who paid $2million in cash for a renovated brownstone because of the pier mirrors, parquet, and the name of the architect qualifies as gritty.

  3. it was essentially the same apartment, except Park Slope was perhaps 50 feet bigger but, had a shared yard instead of a private yard. But, same first floor of a brownstone with the same dimensions and same floor plan. I think the kitchen equipment may have been nicer in Park Slope

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