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The Real Deal // Aug 04, 2014

Downtown Brooklyn
Inventory change from 2009: 50.5 percent drop
Inventory change from 2013: 6.3 percent drop

Although a batch of new rental buildings has opened in Downtown Brooklyn, developers haven’t caught up with buyers’ appetite for condos, prompting the area’s inventory level to flatline over the past 12 months.

There were 104 properties for sale in Downtown Brooklyn in June — a 6.3 percent drop from 111 properties during the same time last year.

Meanwhile, the median sales price was $405,000, down 29 percent from $572,000 one year earlier, which StreetEasy’s Lightfeldt attributed to new developments that came online in 2013.

More recently, CORE’s Bowen said, “There’s nothing on the market.”

But things could be looking up in Downtown Brooklyn — literally and figuratively. With no height limitations for building in the neighborhood (Downtown was upzoned in 2004) it is one of the hottest areas for real estate speculation.

“This is where developers can go big,” Bowen said. “You can’t go big in Park Slope, except maybe on Fourth Avenue.”

In addition to the upzoning, Downtown has transportation, retail, parks, and other prime neighborhoods nearby, said Roger Fortune, vice president of the Stahl Organization, which developed 388 Bridge, a 378-unit condo-and-rental tower in the neighborhood. There were contracts on 30 percent of the condos within two weeks of the sales launch in June.

Inventory change from 2009: 56 percent drop
Inventory change from 2013: 10 percent increase

Like its neighbor Williamsburg, Greenpoint’s tight inventory reflects fallout from the financial crisis, as housing stock soared immediately after the crisis, only to plummet in subsequent years.

Like other post-industrial neighborhoods, Greenpoint’s 2005 rezoning from industrial to mixed-use has attracted developers.

There were 55 properties for sale in the waterfront neighborhood in June, up 10 percent from the same time in 2013. By comparison, there were 125 properties for sale in 2009, or more than twice the number of listings there are now.

The median sale price of $635,000 was down 14.7 percent year over year, but in a sign that sellers were shooting high, asking prices rose 25.2 percent to $875,000 during that same time.

Brokers said the easing of Greenpoint’s inventory crunch signals developer interest in the neighborhood. According to the real estate brokerage MNS, new development properties accounted for 21 percent of Greenpoint’s sales during the second quarter, the highest percent in the borough.

“Greenpoint is really the next big ‘it’ neighborhood,” said CORE’s Bowen, citing new developments such as 77 Commercial, a joint venture between developers Joseph Chetrit and David Bistricer that includes two towers, one 30 stories and one 40 stories, with 720 units combined. Demolition permits for the existing two-story building on the site were filed in June.

Original Article: The Real Deal