Sales prices in Brooklyn climbed for the 10th consecutive quarter, setting a new record, while rents finally seem to have stabilized. That’s the overall picture we drew from data in reports out today from Douglas Elliman and Corcoran, confirming what we’ve been seeing in the market recently.
The Elliman report, prepared for the firm by Jonathan Miller, president of Miller Samuel, showed the median sales price for a home in Brooklyn was up 17.5 percent in the first quarter of this year over the same period last year to a record of $610,894. The median condo sales price hit a new record at $729,750. The median sales price for a one- to three-family home was up 26.9 percent over the first quarter last year to $744,000.
One of the biggest jumps in price was for two-family homes in northwest Brooklyn — the swath of 16 neighborhoods from Brooklyn Heights to Park Slope, from Fort Greene to Dumbo. Prices for those properties were up 46.2 percent over last year.
Home prices in north and northwest Brooklyn continue to rise at a rapid pace, according to a report Ideal Properties released Wednesday. Closed sales were up 21.6 percent in the first quarter over the same period last year.
They were even up 7.1 percent from the previous quarter even though the winter tends to be a slow month for home sales. And the time from listing to closing grew shorter decreasing by 10.5 percent from the same time last year.
Do new, so-called “luxury” apartments seem to be getting smaller? It’s not your imagination. Land costs in Brooklyn are rising quickly, and so developers are squeezing more apartments in per building to make the profits pencil out, The New York Times reported over the weekend. (Sorry, we’re just getting to the story today.) To justify keeping the rents the same, they are adding ever-more baroque amenities.
We’ve noticed lots of high-end apartments (condos as well as rentals) that have strip kitchens in the living room, a space-saving move that seems more reminiscent of “SRO” than “luxury” to us. At the same time, the bathrooms keep getting bigger and more numerous.
Curiously, there’s a technical reason for that: The building code has changed and now requires more clearance for things like doors, resulting in larger bathrooms.
The lion’s share of new apartments in the City is going up in Brooklyn, with 6,500 new rental units and 134 buildings expected to open this year. (That’s double last year’s count of 2,981 units in 36 buildings.)
The story mentioned a few forthcoming big Brooklyn buildings: AvalonBay’s 100 Willoughby Street, City Tower at 336 Flatbush Avenue Extension (City Point Phase 2, pictured above), 247 North 7th in Williamsburg, and Madison Realty Capital’s 490 Myrtle Avenue in Clinton Hill.
In addition to the now-standard amenities in new luxury buildings, such as lounges, fitness centers and even roof decks, some buildings will also feature a basketball court, a lawn, and, at 100 Willoughby Street, “a dog run with separate places for small and large dogs to play and a heated pergola for owners.”
We expect land will only continue to get more expensive.
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?
Block by Block: Bedford Stuyvesant [NY Times]
Video by New York Times, embedded with permission
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 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.
The report will be available later today on the company’s website.
No real estate bust will occur until “the end of the decade,” according to YIMBY. “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.
What do you think?