Why are town homes consistently over $2M these days in "only" the 2nd or 3rd best neighborhoods in Brooklyn? Is it because we're in the midst of a huge housing bubble, fueled by historically-low interest rates that are already climbing, spelling impending doom? Or is it simply the economics of the day that are here to stay for a good while? It was easy to scoff at ~$2M being an overpriced listing in Clinton Hill just last year at 110 Gates Avenue. They dropped from $2.495M to $1.99M to finally close for $1.7M. And now the rentals are flying off the shelves at record-breaking numbers. Listing agent Kelsey Hall tells us they broke a record with the duplex rental in apartment 1 fetching its asking price of $6,100/month!
We were shocked a few months ago when owners in Prospect Heights told us they were after over $6,000/month for their parlor & garden duplex just off of Vanderbilt Avenue. Then they quickly got their number. And now that number has hit down the hill in Clinton Hill. Ah, remember the good old days (2009-2010) when the entire brownstone's rent in these hoods could only gross just over $6,000? Back when those homes were barely worth over a million? Fast forward to today, if just half the house can rent for $6,000, what's the house supposed to be worth? We're no math whizzes, but we figure that $6,000 is to $1M as $12,000 is to....??? You guessed it: $2M+. And that's why a house around the corner at 116 St. James Place can list for $2.4M and get $2.45M in today's market. Last time we checked, "the have's" still HAVE.
Jeez, and by the time Vogue is doing a story to proselytize those precious people on the wonders of Brooklyn, you know the fix is in! What their photo has to do with Brooklyn we'll never know...
Suffice to say, this isn't the Brooklyn of old. On the Prospect Heights / Crown Heights border, a new boudgie restaurant like Bar Corvo's ballin' so hard they need an armored Brinks truck to haul away the bags of cash...
It's still all relative. There are people renting much worse spaces in this same area for the same ~$40/foot. And unless you've got a better 2BR/2 bath duplex with 14' ceilings, a back deck & yard, a killer kitchen, washer/dryer in the unit, and steam shower in the bathroom for LESS than $6,000/month in mind... well then Brooklyn's just gonna keep on keepin' on.
Pro's: killer duplex with all the fixin's, great block, short walk to the train
Con's: price is high, don't expect Clinton Hill to look like Madison Avenue or anything, somewhere someone's still complaining about the C train
Ideally: is the leap from ~$2,000/floor to ~$3,000/floor over the past 4 years in a nice area really news anymore?
Wanna know what I'm excited about? I'm excited for the day (fairly soon me thinks) when this real estate market starts to correct---and correct it will. And all that cheap, easy money won't mean much to falling prices and the panic that ensues. And you people (yes, you people) who seem to believe it will never end will finally and mercifully stfu! The constant cheerleading and piggybacking in this market is a little sickening but worth a chuckle. So keep touting this thing. But I hope you will be able to make a living in something other than real estate bc you're gonna need it.
ReplyDeleteCertainly there's a difference between "touting" and stating the facts, no? This is what's happening. The speed at which it's happening is shocking to us too. But there's still a difference between forecasting the weather and simply saying, "Boy, it sure it hot outside." You'd prefer to run around like Game of Thrones insisting that "winter is coming". So please, enlighten us. What will the catalyst be for the correction that you're predicting "fairly soon"?
ReplyDeleteWe are clearly in the middle of a frenzy. It is abnormal and unsustainable for so many people to show up at an open house and bid the price of something up for fast and so furiously. If our economy were growing and adding jobs at a pace which keeps up with even population growth, then maybe, but only maybe. You think the fin. crisis was insane, wait til the college loan bubble starts to burst. Prices going up and up and up can't keep happening. This can not end well. And we're closer to the end than we are to the beginning.
ReplyDeleteStill waiting to hear what the catalyst is for the correction you're predicting. Of course the frenzy can't continue at this pace, but there's a lot of possibilities between that and a bubble burst collapse. Was hoping to hear a little informed insight from ya, but just hearing the typical Chicken Little routine so far. Smh
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