New York City’s Real Estate Hot Spots

Sometimes you often have to leave Manhattan to find larger space, or to raise a family. Many buyers move to Bushwick or Crown Heights, eschewing looking at apartments in Cobble Hill or Park Slope, where prices are astronomical. Those willing to trade Chumley’s or Il Mulino for The Drift or Peter Luger’s will have to crunch the numbers and decide whether or not to buy or rent.  But they will find that their investment trumps renting quite quickly. While closer-in Cobble Hill and Boerum Hill have a tipping point of 19 years, it would take only 1.6 years of renting in Sheepshead Bay to equal or exceed the cost of purchasing a home there.

Greene street, in Soho, Manhattan, photographed looking south on an early Fall morning. The street is lined with luxury clothing stores, galleries and apartment buildings.

Focusing on the two most desirous locations where real estate can make or break your bank—Manhattan and Brooklyn—Bloomberg has just released  an exclusive interactive map of real estate prices by neighborhood in Manhattan and Brooklyn using fourth-quarter data from StreetEasy in order to determine if someone should buy or sell. To schlep in Sheepshead Bay for a while makes real estate sense. This is the tipping point, the amount of time it would take for the cost of renting to equal or exceed the cost of buying a comparable home. In other words, it’s when it becomes more logical to either rent or buy. The Bloomberg analysis explores the largest listing discounts, the largest price increase or decrease, median asking rents, the average amount of days that properties within a neighborhood stay on the market, among others. Paying a mortgage is indeed feasible if you, say, move to the suburbs like New York-friendly Maplewood or Short Hills,but if you want to live in Manhattan and Brooklyn, the so-called “hot spots,” at what point does it make more sense to buy rather than rent?

For example, in the East Village, the median sale price within the last three months of 2016 was $1.15 million, while rent prices averaged around $3,050 a month. Buying an apartment versus renting would pay off in about four years.

One surprise in the analysis is that Brooklyn buyers have less negotiating power than those in Manhattan. However, in surrounding neighborhoods like Soho, Nolita, and Little Italy, it is wiser to rent, as the tipping point doesn’t make purchasing more affordable until after 31 years. Areas like the family-friendly Upper West Side and the upper crust of the Upper East Side, both neighborhoods that seem impossible to ever live there—sales listings got a price cut.  On the Upper West Side, 42 percent of listings were discounted, and on the Upper East Side, the portion was 45 percent.

It may be impossible, then. The market is flooded with luxury skyscapers, buildings, brownstones, townhouses and there isn’t any holding back. Already, a few skyscrapers are rising on the street: SHoP Architects’ 111 West 57th Street building and Christian de Portzamparc‘s One57. Nearby is Jean Nouvel’s 53W53 and Rafael Viñoly’s 432 Park Avenue. There will be availability there and renters or buyers may, in fact, move to anyone of these buildings because of an excess of available housing. Thus, buyers have more choices and negotiating power than ever before. To buy or rent will constitute New York’s real estate woes in the coming years, and how the game will either change or not. Prices will eventually slash on what was prime market. Landlords, who already offer concessions, will keep doing that and more until all or most units will be filled to capacity. But in the end, the housing market is really just a gut feeling. It is full of emotion—buying, for example, may be the most expensive investment you’ll ever make in your lifetime. If you want that floor in a brownstone in Prospect Park, if it is perfect, if it is your dream come true, things will work out. You will live in the outer boroughs for a while, you will rent a decrepit complex near Hell’s Kitchen, you will cut out Starbucks and cancel that gym plan, but in the end the issue is less about the tipping point than it is about finding a place that takes your breath away, an emotional upheaval, a rollercoaster ride, a wrecking ball making its way to you, all things that are raw and full of inexplicable emotion. This is New York. This is Brooklyn. This is what it looks like to live here.

BONUS

Leave your vote

0 points
Upvote Downvote

Total votes: 0

Upvotes: 0

Upvotes percentage: 0.000000%

Downvotes: 0

Downvotes percentage: 0.000000%

Berkshire Hathaway HomeServices