What’s in store for Brooklyn this year? New Year’s Day is a good time to take stock of what might be just around the corner. Here are Brownstoner’s observations and predictions for the year ahead.
Home prices will continue to increase, but more slowly.
“Pent-up demand from the slower than anticipated fall season will most likely result in a flurry of activity in spring 2016,” broker Gabriele Sewtz of Compass told Brownstoner. “Sellers will try to cash out in anticipation of the market flattening out and rising interest rates. We will see bidding wars around the $1.5 million, the new sweet spot for many Brooklyn buyers. Overall the Brooklyn market will most likely experience more modest growth in 2016 than in the previous years due to buyers being more conservative in their purchasing decisions.”
Housing prices in BoCoCa will hold steady, Peter McGuire, broker and owner of real estate firm Smith Hanten Properties, believes — at least until a “meaningful” hike in interest rates. “Dramatically higher crime and/or higher interest rates, we believe, are the only silver bullets which can reduce sale prices precipitously,” he said.
Mortgage interest rates will gently increase.
With the Fed raising the short term borrowing rate for banks, interest rates will also rise. The Fed raised the rate .025 percentage points in December, and said it intends to raise it about one percentage point a year until the rate reaches 3.3 percent in 2019.
What does it mean for Brooklynites? Not that much, it turns out: “With the recent rate increase that the Fed made and plans to make gradually I do believe that rate will increase over time…but all in all I don’t think that a slight rise in rates will affect things all that much,” Vanessa Thatcher, Senior Loan Officer with Atlantic Home Capital, told Brownstoner.
Could the Mast Brothers chocolate scandal tarnish Brooklyn’s artisanal brand?
In December, a Dallas blogger refuted the brothers’ claim to be a bean-to-bar maker in the brand’s early years. Look for borough makers’ artisanal claims to be exposed to more scrutiny in the coming year. Foraging chefs beware.
Mega retail complex Empire Stores will open.
The enormous redevelopment of historic Empire Stores in Dumbo is set to open in the spring, creating a new destination on the Brooklyn waterfront and bringing more shopping and dining to the area.
While not every retailer in the complex will be ready by the grand opening, Vinegar Hill House, Pizza East and the Brooklyn Historical Society satellite museum are three that are prepping for a spring arrival. Meanwhile, over in Williamsburg, the highly anticipating Whole Foods will also open this spring. It will be the second Whole Foods in the borough.
Street safety will continue to be a hot-button topic.
Street-safety activists have been calling for stricter driving laws in New York, on the theory that they will make drivers more cautious and result in fewer pedestrian deaths. In some other states, drivers are automatically at fault if they hit a pedestrian, except in rare circumstances. Brownstoner anticipates continued emphasis on Vision Zero and more protests against tragic deaths.
Brace for more school rezonings in Brooklyn.
In December in Crain’s, Downtown Brooklyn Partnership President Tucker Reed warned of “persistent and growing overcrowding” in schools in Downtown Brooklyn and nearby areas. In Sunset Park, the Department of Education is hunting for a site for a new school to relieve overcrowding there.
Expect more controversial development in the borough.
Coming in the next year should be decisions on controversial developments Pierhouse and Long Island College Hospital, in addition to Mayor de Blasio’s controversial proposals to create more affordable housing through zoning changes.
One thing Brownstoner does NOT expect to see in 2016: New skyscrapers in Downtown Brooklyn and Brooklyn Heights. There are more than six in the works, but it’s going to take years for them to get built.
Rents will plateau.
In fact, they already have in some neighborhoods, such as Bushwick, according to Jeremy Feit, co-founder and principal, at Lincoln Oak Management LLC. “Developers found out it’s not so easy to rent a four-bedroom in Brooklyn. Getting four people to agree on anything is a little tough,” he said at the Brooklyn Real Estate Roundtable in November.
Brooklyn median rents peaked in August, according to the latest report from real-estate firm Douglas Elliman, but the high prices are nothing to sneeze at: They stood at $2,935 per month in November. It’s been a crazy year.
What are your predictions for the coming year? Let us know in the comments.
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