While we're still advocates of taking market reports with a large grain of salt, the Brooklyn numbers came out this week, and the consensus is clear: Brooklyn's no place for bargain hunters, and the borough's persistent price hikes show no signs of stopping. (In case there were any shadow of a doubt left.) And the group hit hardest by the hikes may be renters.
While Brooklyn sale prices hit yet another record high in the fourth quarter of 2014, according to Douglas Elliman's report—an average sale price of $756,569—there's still a huge gap between that and the average Manhattan fourth quarter sale price of $1.74 million. (Meanwhile, the average sale price in Queens was $492,217, a 15.5 percent spike, but still a relative bargain.) But on the rentals side, Brooklyn's median December rent of $2,900 isn't exactly worlds away from Manhattan's $3,250—especially considering, as Curbed points out, prices between the two boroughs were $1,100 apart as recently as 2008. Queens isn't far behind, with a median rental price of $2,839, though we wonder what that would look like if you took luxe Long Island City out of the equation.
If you need those numbers with an extra dose of drama, Urban Compass president Leonard Steinberg put it this way to New York Magazine: "Prices have reached a point where the [East] River has almost evaporated. It's like Moses came to Manhattan and took the water out and [the boroughs] are very connected."
So, to reiterate, things in Brooklyn are going nuts. One interesting thing to note? Miller tells the Real Deal that the price gap between Manhattan and Brooklyn sales is artificially widened by ultra high-end sales (after all, Williamsburg doesn't have an equivalent to One57... yet). But at the same time, Brooklyn's blockbuster price hikes—an overall average of 10 percent from the previous year—have a lot to do with rapid growth in neighborhoods like Crown Heights, Bed Stuy, and Prospect Lefferts Gardens, according to Corcoran's fourth quarter report. “It’s not like people just started to buy in Bed-Stuy,” Fank Percesepe, Corcoran’s senior regional vice president, Brooklyn, told the Real Deal. “But this year was amazing… The prices catapulted.” Translation: that row of newly-expensive brownstones might have more in common with billionaire's row than you'd think, at least in terms on their outsized effects on the rest of the market.
One bright spot for the non-billionaires among us: concessions are up, according to Citi Habitats' Manhattan rental report, meaning that while rental prices are likely to hurt your bank account wherever you move, but there's a better chance the landlord will cover the broker's fee, or cover a free month's rent. And if you own—provided you're looking to re-invest somewhere cheaper than NYC—it's a pretty great time to be a seller.
Brooklyn home prices set record—but lag Manhattan by $1 million (The Real Deal)