Is Brooklyn Really "Booming"?

David Goldsmith

All Powerful Moderator
Staff member

Brooklyn townhouses hot — condos and co-ops, not​

Price growth for larger homes has outpaced apartments’ gains over a decade​

Demand for Brooklyn townhouses rose during the pandemic, but the surge wasn’t merely a Covid-driven trend.
Prices for townhouses in the borough have been steadily rising for nearly a decade while the condo and co-op market has remained fairly flat, according to a report from UrbanDigs.
The median sale price for Brooklyn townhouses with three or fewer units is now about $1 million, up 85 percent from 2012, when it was $550,000.

Condo and co-op prices also grew, but less. The median price for a co-op is now $780,000, a 59 percent increase from 2012, when it was $490,000. For condos, the median price is $925,000, up 64 percent from 2012, when it was $565,000.
The difference in growth is in part because the market for Brooklyn has more neighborhoods with moderately priced units, such as Bay Ridge, Bensonhurst and Midwood, which eases competition, said John Walkup, who authored the report.

“These areas also have a large number of buildings built to be rentals, which along with the larger supply of sales units, keeps prices in check,” Walkup said. “The townhouse market, on the other hand, is more constrained for buyers.”
With fewer townhouses available and their supply relatively static, their prices tend to rise more quickly in a strong housing market than those of condos and co-ops. Stately row houses in brownstown neighborhoods such as Park Slope and Cobble Hill routinely go for $4 million or more. One in Brooklyn Heights sold in January for $25.5 million, a record price for a Brooklyn home.

Gerard Splendore, an associate broker at Warburg Realty, remembers selling townhomes in Bay Ridge and Marine Park for $750,000 just after the market collapsed in 2008. Now their asking prices exceed $1 million.

“Everywhere that was kind of the fringes is now highly desirable,” Splendore said. “There’s really nowhere else to go, there’s nowhere else to look. You keep pushing further and further out.”
In northern Brooklyn — a region that includes Bushwick, Williamsburg, East Williamsburg and Greenpoint — the median price for a townhouse has risen 24 percent since 2019, according to UrbanDigs.

Central Brooklyn, including such neighborhoods as Bedford-Stuyvesant, Crown Heights and Flatbush, has seen the townhouse median climb 22 percent in that time.
But it isn’t just the increase in sales prices that has an impact.
Large purchases and renovation projects have a trickle-down effect on buyer confidence, said Ravi Kantha, director of Brooklyn sales at Leslie J. Garfield.

“If you’re shopping with an $8 million budget, that’s a lot of money, but if you know that multiple people are spending $10, $12, $15, $20 [million] down the block, it takes a little bit of that hesitation away,” he said.
“I would bet the average asking prices go up pretty significantly in the next year or two across the board,” said Kantha. “It would just be interesting to see what people are willing to pay for.”
 

David Goldsmith

All Powerful Moderator
Staff member
While the Brooklyn condo market is still getting lots of press for being on fire, here's an interesting single data point on pricing:
524 Manhattan Avenue, 4B just closed for $1,299,000

524 Manhattan Avenue, 3B closed 2 years ago for $1,375,000
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
While the Brooklyn condo market is still getting lots of press for being on fire, here's an interesting single data point on pricing:
524 Manhattan Avenue, 4B just closed for $1,299,000

524 Manhattan Avenue, 3B closed 2 years ago for $1,375,000
we are working on a repeat unit model for BK and MH + a pricing model for these two boroughs as well. Here is BK resale PPSF condo price trends, kind of in line i think 1623768655795.png
 
While the Brooklyn condo market is still getting lots of press for being on fire, here's an interesting single data point on pricing:
524 Manhattan Avenue, 4B just closed for $1,299,000

524 Manhattan Avenue, 3B closed 2 years ago for $1,375,000
Actual closing price of 4B was $1.365mm (when we closed this out, for some reason Streeteasy auto-populated back to the ask price not the close price we entered). I noted this on the post on Streeteasy. Pretty good return from where they bought it.
 

David Goldsmith

All Powerful Moderator
Staff member
How deep is the Brooklyn data?
Population of Brooklyn is 2.7 million and Manhattan is 1.6 million. Yet the data we get to see says there are... what?... twice as many sales and 3 times as many rentals in Manhattan? Does that seem realistic, or are most of the deals in Manhattan being reported but only the booming areas in Brooklyn?

It reminds me of a situation in the mid 1990s. Corcoran was using their market report for competitive advantage since they were the first to publish one. People didn't seem to care the data was largely garbage. I remember looking at their 1995 report and seeing that studios in Chelsea had decreased in price substantially each year since 1992. In reality nothing could be further from the case (NB my office was one of the largest in Chelsea at the time and certainly sold the most studios of any in that time period). Corcoran showed something like (I could find the report somewhere if you want exact numbers) the average price in 1992 was $135k, in 1993 $110k, etc. What actually occured was they sold 1 condominium studio at 181 7th Ave in 1992. Then they first started trying to sell in the neighborhood. So by 1995 they probably had a dozen sales including mostly coops.

In the first 6 months of 1992 I personally sold 1/2 dozen studios at 200 West 20th St ranging from $27k to $42k. By 1995 those sales prices probably close to doubled.

I know for sure similar things have been happening in Queens lately and I suspect we still have the same issue in Brooklyn. As the large firms move into new areas they start at the top and work their way down. I think there is a good chance a lot of the Brooklyn data doesn't tell the real story. Add to this a certain amount of the agents/brokers who are just starting to sell in Brooklyn recently (I've sold in that Borough for over 30 years) are working with buyers who are excited to be looking at Brooklyn properties and like all over the country are outbidding the local market.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
The BK data we use for reporting includes:

Listing side - rls and bk mls listings
Sales side - every ACRIS filed BK sale
 
I don't know about all of Brooklyn, what's happening in Manhattan Beach, Bensonhurst, Marine Park, Mill Basin, sheepshead Bay, Bayridge etc.. however in the markets that are represented by mostly REBNY member brokers, there's no question we're seeing very strong activity.

We have a new listing on 2nd Street in Park Slope, it's definitely the sweet part of the market. I think we listed it a few days ago, we now have over 20 appointments scheduled for Saturday and Sunday, with more requests coming in that will have to be handled during the week. You don't see that kind of activity in 'normal' or mediocre markets. It's a beautiful apartment, but it's not extraordinary, and it's not priced soft to attract this type of attention.

In my experience the townhouse market, condo market(especially with outdoor space) under 2.5 is certainly the most active, I know that's a big net to cast on condos. Perhaps I'm a bit biased because we just had to get aggressive to get a deal done at 625 Warren Street. Co-ops above 2 million, I'm not seeing bidding wars there. Although we had multiple offers on both our listings at 135 Eastern parkway, one priced just over 2 million and one priced just under 3 million, it wasn't a frenzy of buyers. That buyer pool seems a little bit smaller, restrained. But these were two pretty extraordinary apartments, the bigger one is in contract the smaller one has a contract out with a backup. It's late, I had a long day. This is not an analysis, just my experiences the last week.
 

David Goldsmith

All Powerful Moderator
Staff member
Here is kind of an example of what I'm talking about. This is a great house:

But the 2 highest sales in that area history were this same house and:

both sold in 2017 and each for less than half this amount ($2,325,000 and $2,450,000). It's Midwood, an area which AFAIK none of the major firms has an office in, but it's a potential "breakout" zone because it has some nice housing stock. I've spent a decent amount of time within 3 blocks of this place and we've done a few deals (i.e. bought and sold) in the surrounding neighborhood.

No one in the area would consider anywhere near this pricing. In fact the reason I found the listing is that I got a "can you believe this?" call from someone who has been flipping houses there for almost 40 years.

The audience for this is these Columbusing firms bringing in folks who have never heard of Fisk Terrace (which is a very nice small enclave) who think $5 million is a low price for such a nice house because they have no concept of the area (like when Michelle Williams bought 1440 Albemarle Road). And when it doesn't appraise the agents will scream that the appraiser doesn't know what they are doing, that they have to adjust for how fast the market is going up, how they should be taking the comps in Prospect Park South, etc. (BTW they shouldn't).

I think either this house will sell quickly to someone who is in buyer frenzy or it will sit around for a long time because no one in the neighborhood is the type of person who would consider trading up to this.
 

inonada

Well-known member
A couple months back, a friend who lives in DUMBO said they were somewhat interested in changing from a condo to a townhouse. When I asked whether pricing was up, he said (at this segment) “not really”. He didn’t end up buying it, but the closing print on it is indeed flat to 2015:

 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I don't know about all of Brooklyn, what's happening in Manhattan Beach, Bensonhurst, Marine Park, Mill Basin, sheepshead Bay, Bayridge etc.. however in the markets that are represented by mostly REBNY member brokers, there's no question we're seeing very strong activity.

We have a new listing on 2nd Street in Park Slope, it's definitely the sweet part of the market. I think we listed it a few days ago, we now have over 20 appointments scheduled for Saturday and Sunday, with more requests coming in that will have to be handled during the week. You don't see that kind of activity in 'normal' or mediocre markets. It's a beautiful apartment, but it's not extraordinary, and it's not priced soft to attract this type of attention.

In my experience the townhouse market, condo market(especially with outdoor space) under 2.5 is certainly the most active, I know that's a big net to cast on condos. Perhaps I'm a bit biased because we just had to get aggressive to get a deal done at 625 Warren Street. Co-ops above 2 million, I'm not seeing bidding wars there. Although we had multiple offers on both our listings at 135 Eastern parkway, one priced just over 2 million and one priced just under 3 million, it wasn't a frenzy of buyers. That buyer pool seems a little bit smaller, restrained. But these were two pretty extraordinary apartments, the bigger one is in contract the smaller one has a contract out with a backup. It's late, I had a long day. This is not an analysis, just my experiences the last week.
Interesting, thanks for sharing Keith. Hmm, when I look at UD pulse in BK, every sector shows strength but Manhattan beach, I wonder if supply or pending is affected in a bad way there for some reason. will check

 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
Here is kind of an example of what I'm talking about. This is a great house:

But the 2 highest sales in that area history were this same house and:

both sold in 2017 and each for less than half this amount ($2,325,000 and $2,450,000). It's Midwood, an area which AFAIK none of the major firms has an office in, but it's a potential "breakout" zone because it has some nice housing stock. I've spent a decent amount of time within 3 blocks of this place and we've done a few deals (i.e. bought and sold) in the surrounding neighborhood.

No one in the area would consider anywhere near this pricing. In fact the reason I found the listing is that I got a "can you believe this?" call from someone who has been flipping houses there for almost 40 years.

The audience for this is these Columbusing firms bringing in folks who have never heard of Fisk Terrace (which is a very nice small enclave) who think $5 million is a low price for such a nice house because they have no concept of the area (like when Michelle Williams bought 1440 Albemarle Road). And when it doesn't appraise the agents will scream that the appraiser doesn't know what they are doing, that they have to adjust for how fast the market is going up, how they should be taking the comps in Prospect Park South, etc. (BTW they shouldn't).

I think either this house will sell quickly to someone who is in buyer frenzy or it will sit around for a long time because no one in the neighborhood is the type of person who would consider trading up to this.
hmm interesting. Awesome house. I am kinda thining the latter, but in this market, you really dont know what someone is willing to pay for after losing out on a few desiered places to competing bidders
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
A couple months back, a friend who lives in DUMBO said they were somewhat interested in changing from a condo to a townhouse. When I asked whether pricing was up, he said (at this segment) “not really”. He didn’t end up buying it, but the closing print on it is indeed flat to 2015:

Love this. We are buildng a repeat unit resale tool to track these kinds of things for our indexes, also in development. Interesting to see the BK market flat from 2015 which was peak in Manhattan, before a 4 yr policy driven slow bleed
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
A couple months back, a friend who lives in DUMBO said they were somewhat interested in changing from a condo to a townhouse. When I asked whether pricing was up, he said (at this segment) “not really”. He didn’t end up buying it, but the closing print on it is indeed flat to 2015:

Here is some BK resale data that John pulled like a week ago - figured to post it. The CONDO PPSF is what I like to focus on for linear price action over time

1624282562365.png
 
I know and love Midwood along with Ditmas Park. I've often recommended it to people, not only a great neighborhood to live in but a place to find some very good values. This is the first place I worked in real estate, for a company called jrd management back in 1988. I've often wondered why it hasn't broken out and certainly many people thought it would when Michelle Williams bought there. We've bid on a few houses there, don't believe we sold anything. Actually we have sold a couple of condos in Midwood and Kensington come to think of it. We've also sold a couple of homes, including one recently in Prospect lefferts gardens.
 
A couple months back, a friend who lives in DUMBO said they were somewhat interested in changing from a condo to a townhouse. When I asked whether pricing was up, he said (at this segment) “not really”. He didn’t end up buying it, but the closing print on it is indeed flat to 2015:

I think once you get over 4 million in Brooklyn, with the exception maybe being Brownstones in Brooklyn Heights. The buyer pool gets very thin.
 

David Goldsmith

All Powerful Moderator
Staff member
Here is some BK resale data that John pulled like a week ago - figured to post it. The CONDO PPSF is what I like to focus on for linear price action over time

View attachment 309
The condo PPSF average is also affected by the mix as new construction in Brooklyn has shifted to larger and more luxurious units over the same time period.
 
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