Manhattan is Out, Brooklyn is In
Finally there is evidence to support a fact that most New Yorkers have known for a long time—Brooklyn, not Manhattan, is the place to be. According to Douglas Elliman’s first quarter report, the Manhattan real estate market may have finally plateaued after two years of steady price growth. Meanwhile, Brooklyn is high in demand, with the median sale price up 17.5% year-on-year. If you are thinking about crossing the river, you are obviously not alone.
The Elliman report reveals that the median sale price in Manhattan was down -.2% in the first three months of the year, which basically indicates price stability. More significant is the drop in the number of sales, which was down almost 20%. Luxury units in particular have taken a hit with the median sale price decreasing by -10.6% year-on-year and the number of sales down 19.6%.
According to a recent report in New York magazine, the prevalence of super luxury units in Manhattan may be precisely the motivation behind home buyers’ shift to Brooklyn. Yet another fact that New Yorkers have already known for a long time—home buying in Manhattan is for the super-rich. The more moderately well-off prefer the less ostentatious charm of Brooklyn. In sum, Manhattan is for the Jay-Zs and Beyonces of the world; meanwhile Anne Hathaway has a place in DUMBO.
This dynamic isn’t likely to change any time soon as a remarkable number of new super luxury developments begin sales in Manhattan in the coming months. The two standout examples are the Robert A.M. Stern-designed buildings at 520 Park Avenue and 220 Central Park South. When these developments launch sales this spring and summer, their respective penthouses are predicted to go for $110 million and $175 million. According to Curbed.com, the cheapest unit in either building rings in at $12 million.
Meanwhile, in Brooklyn, prices don’t begin to touch the Manhattan level but are at their highest in 12 years, according to Elliman. The north region (Williamsburg and Greenpoint) and the east region (Bedford-Stuyvesant and East New York) have seen the most significant price increases. The median sale price in the north is up 32.5% year-on-year, while the east has seen a whopping 56% increase. The median sale price for Brooklyn luxury units was up 14.2% in the first three months of the year.
Brooklyn will also see a fair number of new developments hit the markets this year. Though they may not come with the drool worthy floor plans of Manhattan’s triplex penthouses, they also don’t carry the same price tag. For example, 150 Richardson Street in Williamsburg will offer eight units of pleasant exposed brick walls and hardwood floors judging by the photographs, starting at a rather affordable (by New York standards) $949,000.
For those searching for something slightly higher end in Brooklyn, the Brooklyn Trust Company in Brooklyn Heights offers a number of great amenities, including a pet spa and rooftop terrace, with units priced from $3.35 to 4.35 million. Sales are scheduled to launch this summer.
With high quality units available at relatively affordable prices, Brooklyn is likely to maintain its reputation as the cool kid on the block for quite some time.