Brooklyn Residential is the New Manhattan
- Jan 21, 2015
The Ideal Properties Group has released its latest Brownstone Brooklyn and Beyond market report and found residential sales prices increased 32 percent in Brownstone Brooklyn and North Brooklyn in the fourth quarter of 2014 over the same period last year, and rose 7.5 percent from the previous quarter.
“If you are planning on buying a townhouse in Brownstone or North Brooklyn, now may be your last chance… unless of course you’re planning on spending in excess of $1 million on your purchase,” Aleksandra Scepanovic, Ideal Properties Group’s managing director, told Commercial Property Executive. “In fact, in the coming years, if the accelerating trend of townhouses in the area trading at $3 million and over continues, your chances at purchasing a townhouse under $3 million will diminish by the day.”
The report showed that Brownstone Brooklyn and North Brooklyn’s residential properties sold for an average of $1.282 million. Median prices increased 12.4 percent to $950,000 from the previous year and average prices per square foot grew by 24.4 percent to $919, while median prices rose from $769 per square foot to $910, rising 18.3 percent.
In 2014, only 11 townhouses sold at a price under $1 million, all 11 closing during the year’s first three quarters; while record-breaking prices are continuing to exaggerate the median sales prices in the area to $2 million, up 27.3 percent quarter over quarter, and up 46.5 percent year over year.
“High prices reflect pent-up demand for Brownstone and North Brooklyn, the two having become a favorite destination of a wannabe townhouse owner with little budget constraint,” Scepanovic addded. “Brooklyn is no longer merely an attractive alternative to Manhattan, rather, it is a first choice.”
Looking at the year ahead, Scepanovic predicts there will continue to be escalations and “record-breaking” price points across the borough. The condo and co-op markets are expected to continue to flourish, while the irresistible townhouse market, and its scarcity of offer, will likely continue to enchant many a potential, even the currently dormant, buyer.
Furthermore, pricing escalations are spreading outward from the Brownstone Brooklyn zone (with Park Slope its epicenter) and North Brooklyn area (radiating from the ever-popular Williamsburg) to affect eastern portions of Brooklyn, primarily pushing pricing upward in Crown Heights, Bedford Stuyvesant and Prospect Lefferts Gardens. The trend is expected to continue throughout 2015, with other neighborhoods (e.g. Kensington, possibly even Ocean Hill) joining the list later in the year.
While the report shows that there was a slight increase in the supply toward the end of the year, the increase was not dramatic enough to fulfill the need dictated by the many buyers who have been trying to purchase in the area, unsuccessfully, for the last year or so.
“When it comes to townhouses, they will forever remain in limited supply given the simple nature of the asset, and the fact that no comparable level of workmanship exists today—or at least not at prices even remotely feasible or likely to spur new townhouse development,” Scepanovic concluded.
The report analyzed closed-sales data of individual co-operative and condominium units, and one- to three-family townhomes in Brooklyn. Rolling sales reports issued by the New York City Department of Finance (ACRIS), and the REBNY Listings Service (RLS) data were used as primary data sources in the compilation of this report.