After being priced out of some of the more desirable neighborhoods on the island such as SoHo and TribeCa, buyers are now gravitating towards more possibility and a gentler vibe by buying into areas “off shore,” such as Brooklyn.
Interestingly, these demographic shifts tend to raise the quality of life for everyone. Brooklyn Heights, Park Slope and DUMBO are quickly becoming more and more appealing to the average New Yorker, with rents rising quickly in all three areas (always a reliable barometer for the overall health of the neighborhood). Both long-time as well as newer residents alike stand to gain, as owners see the value of their properties rise with many able to live in a “chic” area that was previously unattainable. In Brooklyn alone, the numbers were up at 1,558 sales in the 4th quarter of 2011, and up over 7% from 1,458 for the same period the previous year. Manhattan saw more sales (at 2,011), but experienced an overall drop from 2,295 units sold same period the previous year.
In fact, on the coattails of this residential swing, there is a corporate one as well. According to Rich Calder, “Despite 9 percent of New Yorkers being unemployed according to the state Labor Department, the growing tech industry in DUMBO, the small, affluent waterfront corridor between the Brooklyn and Manhattan bridges, canâ€™t find enough qualified workers.” And with over 300 tech related jobs in the area to fill, many people are turning their sights away from Manhattan, with some even dubbing the area “Silicon Beach.”
Listing discounts and prices per square foot also have had a story to tell in this market. In Manhattan, listing discounts fell to 4.9% from 10.4% for the same period last year and decreased to an impressive 1.3% for Brooklyn.
While Manhattan sales seem to be holding steady in terms of price, the limited inventory in places such as Brooklyn is creating competition and fostering rising prices not seen before and, in some cases, now rivaling those of even Manhattan.
There is inherent value in Brooklyn for some: schools, family and the desire to live in a smaller, tighter-knit community are all major factors for many buyers when considering the outer boroughs. Absolute prices are competitively lower without sacrificing caliber or sophistication. On a price per square foot basis, a factor of paramount importance, Brooklyn is beginning to offer New York buyers more “bang for their buck,” an idea that holds a great deal of weight– especially at this time.
Still, prestige plays a large part in the decision process for buyers, and Manhattan reigns as perhaps one of the most prestigious areas in the world to live for good reason. Brooklyn buildings generally fall second to their Manhattan counterparts when it comes to items such as amenities. Additionally, proximity to work plays a large part in housing decisions and, with the highest concentration of jobs in the five boroughs focused in the downtown Manhattan area, a long commute is often times not looked upon favorably. Taking this all in, Brooklyn is poised to cast off its outer borough connotations and make a strong statement in the New York City property market.