Brownstone Market: Trouble on the Fringes?
This month’s issue of The Real Deal has an article about the ramifications of a cooling real estate market in Brooklyn (despite the debatability of that assertion). TRD contends that the more “farflung” nabes are the most vulnerable, pointing not only to some price reductions in spots like Bed Stuy as well as signs of…
This month’s issue of The Real Deal has an article about the ramifications of a cooling real estate market in Brooklyn (despite the debatability of that assertion). TRD contends that the more “farflung” nabes are the most vulnerable, pointing not only to some price reductions in spots like Bed Stuy as well as signs of mortgage lenders becoming more stringent about appraisals and comps. One Brown Harris Stevens broker claims that houses in Bed Stuy that may have been selling for for around $800,000 a few months ago now have asking prices closer to $600,000. Maybe, but frankly we haven’t seen many examples of such a dramatic shift. Sure people are being more deliberate in the search and may be less likely to plunk down a million bucks for a wreck in a less proven area, but 25% decreases are the exception not the rule as far as we’re aware.
Doubts on Fringe of B’kln [The Real Deal]
The most important part of articles like this is the most overlooked part of any ‘market’= psychology.
People only talk about supply and demand, but the supply of brownstones didnt decrease in the last 5 yrs (in fact given crime stats, and gentrification trends – the supply in a sense rose) and though the population rose somewhat not enogh to sustain 100%+ price increases – what really changed was psychology and that effected demand.
Essentially people believed that prices will allways rise – therefore they felt compelled to buy quickly and at ever increasing prices.
BUT what articles like this do is change that psychology – it gives buyers the impression that they can wait – for better choices or possibly lower prices. If this psychology grows, buyers will hesitate more, sellers will worry about waiting to sell (for a lower price later) and will try to sell quicker (ie lower) and prices will fall. The housing market today reads exactly like it did in 1989.
Is Bkborn’s rental argument theory true? I’d like to hear from some Bed Stuy landlords and renters. We’re in the process of restoring our BS brownstone and we’ve had a couple of people knock on our door after seeing the rubbish outside, asking if there will be an apartment to rent.
See, I have a very different theory about the fringes. The prime nabes are so out of reach that if they came down by 50%, your average 1st time home buyer still won’t be able to afford them. I think the “fringe” areas have some catching up to do. AND can someone please explain to me why A train Bed Stuy is worth so much less than F or R train Park Slope South? I’ve lived in both and BS is sooo much more convenient for a city commute.
Come on people – AREAS of bedstuy are not “to” good, but stop giving it such a bad rap! Spend some time over here and meet the people. Walk around the neighborhood. I have NEVER lived in a more welcoming neighborhood. If you would like to email me I will happily invite you over for a tour of the “not to good area”.
I know we all have our own opinions, and mine is that I’m so tired of hearing Bed-Stuy called “fringe” or “risky” or whatever negative adage of the day someone wants to use. What is really underlying all of this is the inherent racism that permeates much of what we as white America do and think… bed-sty is scary and “fringe” because it is unfamiliar to the majority of the audience on this site. That’s ok, but I invite you to explore that a little and challenge yourself.
To the people who live here it is not scary or unfamiliar, they would MUCH rather have the Doubles Shop on Nostrand, Melanie’s Caribbean food (amazing Roti!!!) on Fulton, and every other jerk joint on each corner, than a Starbucks. Others of us would welcome more of a mix and hope it is coming…but it is this kind of talk that keeps it from happening.
For those of us who live here we don’t look at the housing market as the be all end all of how our neighborhood is doing. It is a blip on a larger radar screen, and a market that is not so inflated may keep all the “flippers” away and attract people who plan to stay and invest their time and presence in this community.
What do people think about me trying to put together a Bed-Stuy walking tour to help “outsiders” become more familiar with this vibrant little neck of the woods?
Thanks for reading and listening. Bring on the counter opinions! 🙂
Amy
I respectfully disagree with a few comments above. first of all there are many people who rent in bedstuy one of them being myself and many others I know. secondly, I’d totally disagree that bedstuy is not a nice neighborhood, its not my intention to start the whole arguement about bedstuy but the truth is bedstuy is a great area, it has its bad parts but what neighborhood doesn’t? I agree that some of the properties are becoming overpriced but where aren’t they overpriced right now? I would not pay a million dollars for a property in bedstuy at this point but thats not to say that its a bad area. I would venture to say that people like donnie probably aren’t very familiar with bedstuy because if you were you wouldn’t make a blanket statement like “its not too good of an area” because thats a lie.
One test of this theory will be how the high-priced houses currently on the market in Lefferts Manor do (since the area is mentioned in the article). The houses asking in the 900’s will be probably sell close to asking, but if this article is on the money the places listed at 1.3 to 1.6 aren’t going to go for near asking. With the market in “flux” many smart people will think long and hard before paying record amounts on a fringe area.
We must remember Bedstuy is BKLYN’s largest nab. What’s on the market for 600k is not in the prime sections of Bedstuy. A house priced that low in the Stuyvesant Heights section would not last a week on the market.
@ 9:11
A couple of years ago, an appraiser “warned” me about blocks north of Quincy (being generous, I think) in Bed-Stuy.
The house in your link is on Van Buren. I don’t care that it is b/t Stuyvesant and Lewis. It is going to be a tough house to sell–especially when you include the hospital-white painted….everything and (based on a pic) questionable floors.
With all due respect, since when was access to the J-line a selling point?
“A new boiler and hot water tank will be installed by the owner.” – why not install it first and use the upgraded mechanicals as a selling point?
I think the central reasoning is that the prices that are most inflated above their fundamentals (ie. those that have risen the most in percentage terms recently) are likely to experience the sharpest percentage decrease.
I know a few people who have bought in Bed Stuy, but I know nobody who rents there. Buying a two-family house in order to rent half, only works if there is a liquid rental market. Up until recently many could probably afford a Bed Stuy Brownstone sans tenant, but those days are gone.
i’m guessing the far reaches of ft greene must include the other side of myrtle, toward the bqe and navy yard.