While I generally focus on Brooklyn, it’s always good to keep an eye on Manhattan. After all, no matter how many articles you read about how much Brooklyn has arrived, Manhattan is still NYC anchor, and while Brooklyn real estate may be the first choice for some, there are others who are choosing it because they can’t afford Manhattan.
Recently Corcoran released their Q3 report, and it showed some interesting trends:
sales remain high, Q3 2014 posted the second highest number of sales in the past five years.
still tight inventory, especially in the “affordable” market.
only 6% of sales were new development, a remarkably low number- likely due to most new developments still being under construction.
average price per square foot continues to climb, up 12% annually, now at $1,300+p/sf.
resales performed well average ppsf for coops up 12% and 7% for condos. However, both were dramatically eclipsed by new development which posted an increase of 30%
Clients are often surprised by these metrics, especially the condo vs. coop appreciation for price per square foot. They get use to Brooklyn and think Brooklyn is already expensive, they’re flabbergasted that the average price per square foot in Manhattan is $1,300+. Still, it’s worthwhile to keep in mind this is average, not the median, so a couple high priced listings (which Manhattan has plenty of) will skew these numbers up.
Manhattan real estate growth can be summarized by New Developments. There are some very sticker-shocking new developments coming down the pipe. A couple of the new ones that have gotten a lot of press:
225 West 57th Street (Nordstrom Tower)
220 Central Park South
157 West 57th Street
111 West 57th Street
53 West 53rd Street
520 Park Avenue
432 Park Avenue
57th Street is becoming so populated by the uber rich that it’s become known as billionaire’s row.
As little as 5 years ago, no one had heard of Downtown Brooklyn. When we started canvassing for houses here my agent called us “pioneers”. And I could see why, the area was desolate. There was litter and trash around the Oro — one of the first “pioneering” new developments in the area, and at night there was only a handful of windows lit. In 2009 Curbed called it one of NYC’s Ghost Towers. Fast forward a mere three years, and Oro was one of 2012’s top 10 Best Selling Buildings in ALL of NYC. Believe it.
Four years later, and Downtown Brooklyn is the belle of the Brooklyn ball — new developments are sprouting up seemingly every month, not quite over priced yet, unparalleled accessibility to Manhattan, and with NYU making deep strides it’s the new college town of NYC. Gone are the days that people whispered about “Murder Ave” (a/k/a Myrtle Ave.), everyone has moved in, Shake Shack, Panera, Hill Country!!! and a handful of local restos and eateries. The islands along Flatbush are a verifiable botanical garden, complete with blossoming trees and benches to take it all in. And Metrotech sparkles with tulips in spring. It is so gentrified that it’s hard to imagine or even remember the gritty way she once was.
But now that this is my last night in Downtown Brooklyn as a resident, I do remember. I remember when we celebrated the opening of ANY national chain stores along the Fulton Mall, … Aeropastale! I remember when Jay St, Metro Tech and Bridge St were not the same station, when CVS along Myrtle was constantly being burglarized .. well that does still happen, but they take NYU campus cash now. And of course, before Barclays. Today the neighborhood that was selling new development condos for $500-$600p/sf and less, is now selling for $900 – $1,100p/sf or more depending on which development you’re looking at, and the people that made this into the new “it” neighborhood are moving on to other neighborhoods.
At some point every agent / broker will be asked either by a potential seller or their friends, how can they sell their home as fast as possible, and as high as possible. Invariably, whoever it is that’s asking this question already has a price in mind, the skill for the agent is to know what that price is, so they can appropriately frame their response. In markets like these sellers often think they can name their price, the real estate market is once again trending up at an unbelievable pace, bidding wars are happening even in the most undesirable locations, and every seller thinks their home is a bit of paradise so why shouldn’t they get the bidding war, and why shouldn’t they get the price they name? Because, it’s not the seller that sets the price, it’s the buyer. A seller can list for however much they want, it doesn’t mean it will get sold, not even in this market.
If I hadn’t become a real estate agent, I’m 100% sure I would have pivoted into being a home organizer. The thought of organizing a home gives me a special kind of thrill, even now I day dream about it and wonder how I might fit it into my day job. People, often confuse my need to organize with cleaning — I like cleaning too, but I prefer organizing. I can live with a little dirt, but I have a hard time living with clutter. Neatness doesn’t cut it either, people who don’t understand my profound feeling of freedom from de-cluttering and organizing often categorize my eccentricities as “neat”. It is not neat. You can be neat and still be very cluttered. Everything will have its place, but there’s just TOO much of everything.
Brooklyn has been in the spotlight for some time, and some of her trendiest neighborhoods continue to get all the air time. Everyone knows about Williamsburg — it’s practically synonymous with hipster, Park Slope has been established for decades and is the unofficial capital for strollers, Brooklyn Heights, DUMBO, Carroll Gardens, and Cobble Hill – all established neighborhoods. Then there are the secondary neighborhoods, neighborhoods that have become recently established or maybe just not as popular as the primary neighborhoods – Fort Greene, Boerum Hill, Prospect Heights etc,.. and while Clinton Hill should probably be mentioned in this second category, it seems it hardly ever is. Instead, we spend maybe half a breath looking at Fort Greene and Prospect Heights as alternatives to Park Slope and when that fails — we skip straight to Bed-Stuy, Bushwick and to a lesser extent Crown Heights, the three new belles to the Brooklyn Ball.
So, why no love for Clinton Hill? It’s not for lack of aesthetics, Clinton Hill is arguably one of the most architecturally rich neighborhoods in all of NYC, not surprising since it’s home to Pratt. Its mansions are gigantic and graceful. Practically every street is treelined. It’s so beautiful that you could point your camera in any street in any direction and you would be hard pressed to get a bad shot. This wasn’t always the case. Less than even 10 years ago, Myrtle Ave. the northern border of Clinton Hill was colloquially known as “Murder Ave.”, Pratt students were told to never walk there at night, and never alone during the day.
One of the most common questions I get from friends and family is, “where would I go if I sell?” People become complacent in their new found homes, and to be fair many people buy a home thinking they would be there for life, or at least a really long time. But, while building roots is beautiful, there’s something to be said about moving to the next area that’s poised to appreciate. Your home doesn’t just have to be where you live, it can also be a kind of investment. But still, where?
I think by now the answers are quite obvious, areas like downtown Brooklyn and LIC (yes Queens!) — while still appreciating are now becoming expensive and established. Homes here easily sell for $1,100+p/sf or more. The next wave of appreciation that’s been on everyone’s lips are Bushwick, Bed-Stuy, and Crown Heights. My favorite of these is Bushwick, but you really can’t go too wrong with any of them. And you best get in on it soon, condo prices in these areas rose a shocking 34% year over year. And townhouses rose even more dramatically, single family houses escalated over 85% year over year. These increases are not sustainable in the long term, wait too long and these neighborhoods will become established, and the opportunity lost. We’ll have to wait for the next NEXT neighborhood, Prospect Park South anyone?
For the past couple of years it seems like everyone has been talking about Brooklyn, to the point of over saturation. By now you would think people would have tired hearing about Brooklyn, but such it seemed was not the case. People actually went deeper into Brooklyn. We saw increased sales in south Brooklyn as people flung a wider net to find quality and affordability. New product remained tight, last year new development comprised over 20%+ of sales, currently it made only 13%. High demand and low supply in new development drove prices even higher, posting 9% gains in median price, and 15% in average price.
But not all prices drove upwards in record breaking numbers. As the market mummers have been saying, we’re seeing buyer fatigue. There’s only so much that buyers are willing to pay, before they decide to either move out, or continue to rent. Market wide, across all sales we only saw a 1% increase in median price year-over-year and a 3% increase in average price. Part of this is due to the increased sales traffic in south Brooklyn, but potentially the market, is becoming fragmented with new development still pushing the envelop, but everything else taking slower steps.
For many first time home buyers in Brooklyn the task of coming up with the downpayment is so daunting, many give up without even trying. Putting down 20% for a home seems unattainable to many would-be-homeowners, and in this market — where over 50% (nearly 80% in Manhattan) of home purchases are bought with all cash, 20% is too little. How does one compete under these conditions? First, you have to save, and don’t think of saving as a sacrifice, remember money saved is just as good as money earned. There are some low hanging fruit that I think offer good opportunities for young people to save: