Despite headline grabbing, record breaking condo sales, the general trajectory of Manhattan’s real estate market since 2015 has been downwards. An overabundance of new condos and rising interest rates have turned much of The Big Apple into a buyers’ market. Up and coming Brooklyn, however, has been bucking the trend. While frothy Manhattan and trendier parts of BK hit stratospheric sales prices a few years ago, gentrifying neighborhoods, it seems, have only just gotten the memo.
Constatine Valhouli, co-founder of the real estate analytics firm Neighborhood X, told CNBC that Brooklyn has become its own ecosystem in terms of living and working. Residents no longer feel the need to live near Manhattan. Thus, traditionally blue collar or low-income neighborhoods such as Sheepshead Bay, Sunset Park, Crown Heights, Bay Park and Coney Island have seen major developers bring their bulldozers and excavators to town.
“Ten or fifteen years ago, Brooklyn was oriented towards jobs based in Manhattan,” Valhouli said. “Today, that is no longer the whole picture, as there are significant employment clusters in Downtown Brooklyn and Sunset Park.”
In a Bisnow article entitled, Brooklyn Is Now The Real Estate Investment Darling Of The City, an Ariel Property Advisors sales executive recently stated, “What we’ve seen in the past year is people looking for simply stable cash flow. We’ve seen less development transactions … more stable, multifamily, affordable transactions, in-place cash flow. There’s still huge demand for rental housing, [and] within rental housing — affordable housing. And, frankly, if you look at the condo inventory in Brooklyn, there is still not a lot of supply.” Meridian Investment Sales Director Richard Velotta said in the same article: “I think people are betting on fringe areas [like Bushwick and Bedford-Stuyvesant] continuously getting better.”
No area in Brooklyn seems to be mentioned more frequently these days than Sunset Park. The $1 billion redevelopment of Industry City has sparked millennial energy throughout the neighborhood. Its proximity to Park Slope has had a knock-on effect with people priced out of the Slope now considering Sunset Park as a viable alternative.
Nearby Bay Ridge has also enjoyed the Sunset Park spill over. Known historically, along with neighboring Bensonhurst as an Italian neighborhood, the influx of Asians, Eastern Europeans and Central Americans has brought culture and food to the area as well as buyers and renters looking for deals on cheaper accommodation and a chance to be close to the water.
Flatbush and East Flatbush were always thrumming, heady havens for Caribbean culture and small businesses. Brooklyn College is one of the area’s most famous features, with an influx of students both local and international. Now developers, investors, and residents are taking note of the neighborhood’s potential. Cheaper rents are a big lure. According to ny.curbed.com, “The median rent in East Flatbush hovers around $2,100 and in Bed-Stuy around $2,499; that’s markedly less expensive than Brooklyn’s overall median rent of $2,539 and New York’s overall median rent of $2,677.” The area is within striking distance of Prospect Park, has great subway access, and hordes of pre-existing townhouses. Add new condos to the mix and an increasingly diverse population, and one of Brooklyn’s best kept secrets is seemingly out of the bag.
So, while some of NYC’s more established neighborhoods wonder where the bottom of the market is, for many of Brooklyn’s former hard scrabble areas, the only way appears to be up.