Brooklyn is scaling the heights again.
A new Corcoran report on the sale of Brooklyn apartments shows that the median sales price for the first quarter of this year was $606,000 – 15% higher than one year ago and the highest price since 2008.
The price peak reflects the first time the $600,000 threshold has been passed in the borough since the fourth quarter of 2009 and comes with a median price per square foot for a borough flat that is now a mind-boggling $847 — an 11% uptick since last year.
That follows revelations by StreetEasy that median prices for residences in East Brooklyn — Bedford-Stuyvesant, Brownsville, Bushwick, Crown Heights and East New York — grew 20.5% in a year — triple the borough-wide boost in prices.
“Something has to give eventually,” said Virginia Smith, senior editor at Brick Underground. “Wages aren’t going up demonstrably, yet prices keep going up.”
But foreign buyers and investors are pouring money into the borough, raising prices beyond the reach of many people trying to realize their American dream of owning a home. “It’s insanity,” she sighed.
“There are so many buyers in a position to pay all cash, it’s very difficult” for people without a bodacious bankroll “to even get into the game,” agreed Monica E. Kipiniak, a real estate lawyer in Downtown Brooklyn.
She has one client who doubled the investment in four years upon selling a Boerum Hill brownstone for $2.5 million six months ago.
Another client bought a co-op in Ditmas Park for $390,000 in the summer of 2013 and is selling it now for $550,000 “without having put a bit of work in it,” she related. “Buyers have little or no leverage, bidding wars are common. . . . It’s crazy,” she said.
“It’s ridiculous, the prices going on right now!” exclaimed Joey Allen, 36, a production assistant who regularly receives letters asking him if he wants to sell his Bed-Stuy condo.
“The future isn’t looking good for the middle class being able to buy in Brooklyn,” he said somberly.
Seeking equity and freedom from rent increases, Allen had the foresight to buy a two-bedroom condo two years ago. “I feel good about that: I got in just in time,” but he realizes his plan to trade up and out of his 560 square feet into a brownstone is now probably a fantasy he will never be able to realize.
East Brooklyn has seen particularly high price spikes because people priced out of Manhattan and other parts of Brooklyn are now descending upon the area seeking affordability. That demand has driven up prices, said Alan Lightfeldt, data scientist for StreetEasy.
He is forecasting that prices in the borough will continue to rise “but not as fast,” perhaps less than 1% next year.
“The luxury market has long been over served,” and will see continual declines, but the “non-luxury market” which StreetEasy defines as properties under $980,000, is still in incredible demand.
“If you’re looking for a home under $1 million in Brooklyn, it’s really hard,” Lightfeldt said.
Prices plateauing where they are does not comfort Prospect Heights renter Diana Lee-Chung, 48, a social work supervisor: She is concerned about the city’s burgeoning homeless population and works two jobs “just to pay the rent.” She is not looking to buy: “I can’t afford to. I want to be able to eat.” (With Ann W. Schmidt)