Halstead’s Fourth Quarter 2018 Brooklyn Residential Market Report
An area breakdown—Across Brooklyn, the average price for a 1-3 family house rose to $1,142,184, up from $1,029,877 a year ago. The average apartment price in Brooklyn was slightly lower than last year, pricing in at $796,856.
Brownstone Brooklyn—The median apartment price rose 4% over the past year. While co-op prices were above 4Q17 levels, the average condo price per square foot fell slightly.
North Brooklyn—Both the average and median apartment prices came in slightly higher than last year. The average 1-3 family price was 1% lower than the fourth quarter of 2017.
Central Brooklyn— At $740,066, the average apartment price was 8% higher than last year, and the median price rose 2%. In addition, the average price for a 1-3 family house was 7% higher than last year.
South Brooklyn— The average apartment price of $490,149 was 6% higher than 2017’s fourth quarter. Condo prices averaged 14% more per square foot than a year ago. The average price for 1-3 family homes rose 8%.
Neighborhoods that saw the most growth—Seagate has seen the highest price increase (43%) beating Cobble Hill (39%) by 4 percentage points. The average price in Seagate increased by $208,500. This number shows that more and more New Yorkers are moving to Brooklyn neighborhoods with waterfront views.
Trish Martin: Brooklyn in 2019
For years, Brooklyn has been popular among New Yorkers looking to escape the hustle and bustle of Manhattan. While other boroughs adjust to shifting markets, Brooklyn has shown a steady momentum time and time again. The beauty and charm the borough offers is unmatched by surrounding areas–one of the many reasons why it’s so desirable.
But as of recently, Brooklyn’s market has been surrounded with questions. After the announcement of the closure of one of North Brooklyn’s main subway lines, the rental market took a hit. And now, the news of a potential halt to that shut down has left many second guessing their forecasted fate of Brooklyn in 2019.
I spoke with Trish Martin, Halstead’s Managing Director of Sales, Brooklyn, to settle the confusion and lay out exactly what to expect from Brooklyn in 2019.
Will prices continue to fall in 2019?
The market report shows that the average apartment price in Brooklyn fell lower than last year to $796,856. However, Martin doesn’t believe this is an indication of a slow market in the year ahead. The average price may have fallen just below last year’s mark, but across the board, prices have been fairly consistent and are expected to stay that way. The reality is, there is never a bad time to buy in New York. And, while the very high-end of the market is moving at a slower pace ($5 million and above), real estate that is priced affordably will continue to move quickly in Brooklyn’s popular neighborhoods.
Who will be the buyers and renters in Brooklyn in 2019?
In 2019, Brooklyn will likely see an increase in renters as interest rates rise. However, this is a trend that will likely hold true across the entire city. For Brooklyn neighborhoods, whether buying or renting, long-time popular areas will continue to stay popular: Brooklyn Heights, Park Slope, Bed-Stuy, Bushwick, Williamsburg, etc.
There are two types of buyers in Brooklyn, as described by Martin: those who buy a home for homeownership and those who are tied to new amenities. For those who enjoy the charm of smaller buildings and the perks that come with it, Brooklyn offers a healthy amount of prewar buildings. And, for those who are tied to new amenities offered by new developments, there is now a growing market for them as well.
Martin believes that Brooklyn will see a large amount of both types of buyers in 2019.
The rise of new developments in Brooklyn
New developments are popping up all over Brooklyn. The appeal of city life without Manhattan’s clutter has attracted developers looking to bring the flavor of modern day living to the borough. Martin confirmed that yes, new developments are on the rise, and yes, they are popular, but those prewar high-ceilinged buildings are not engaging in a power struggle. Brooklyn’s authenticity, brownstones, and 20th century units are still its biggest attractions.
The rise of new developments will only strengthen Brooklyn’s market. Those who are tied to new building amenities will move to Brooklyn seeking a more desirable area.
The L train shutdown…or not?
Last year, the fate of Brooklyn’s real estate market made headlines as the L train shutdown crept closer. And now, after news of the possible halt to the shutdown, many are wondering what’s in store for North Brooklyn.
The news of the shutdown inevitably impacted renters’ decisions over the past year. Renters are the least committed residents. So the news of the L train shutdown, one of North Brooklyn’s major lines, undoubtedly persuaded prospective renters to look elsewhere, resulting in lower rents in the area. And, news of a halt to the shutdown will cause those rents to go back up.
However, Martin explained that whether or not the L train shuts down, North Brooklyn will remain a desirable place to live for prospective buyers and renters.
Williamsburg, one of Brooklyn’s most popular neighborhoods, will continue to be a competitive market even in the case of the L shutdown. Martin explained that not only are there alternative routes to Manhattan for those who commute to the borough daily, but there is also a big population of residents who work from home, or in the area. Digital entrepreneurship is not only reshaping the office market, it’s reshaping the residential market as well. According to Martin, Williamsburg is loaded with business owners, remote workers, and local workers. And for those buyers and renters who don’t have an early morning commute to Manhattan, the lack of an L train will not negatively impact their daily lives.
Trish’s last piece of advice:
I think if anyone is looking to buy or if buyers are hesitant, it is important to remember that Brooklyn is one of the fastest growing markets, historically. It WILL continue to grow. There hasn’t been much of a market adjustment that tells us otherwise. If you’re thinking about buying, you should do it. If you don’t buy, it is going to be harder to get into the game down the line because prices will continue to rise. The market will continue to be strong (no indication of a slowdown) but even if things do slow down, Brooklyn’s markets will always be competitive.