LATEST NEWS

Brooklyn Is King Of New York When It Comes To Decade Long Price Increases

New York has always been a safe bet when it comes to real estate investing. Now, here are the numbers to prove it.

By Jeff Vasishta February 13, 2017

If you were sitting on the fence a decade ago, wondering whether to buy a property in NYC, you might be kicking yourself now for not doing that. Who could have predicted just how expensive NYC real estate has become? Sure there was a crash in 2008—but NYC, unlike much of the country, seemed to dust itself off quite quickly. Prices soon continued to escalate at breakneck speed—at three times inflation, in fact. Brick Underground broke down the numbers and they make for every investor’s real estate fantasy.

When Jonathan Miller, president of the appraisal firm Miller Samuel (author of Douglas Elliman market reports) gave some hard data on a decade’s worth of change, Brooklyn came out tops. The average price of a property (condo, co-op, one-three family building) at the end of 2006 in Kings County was $563,712. At the end of 2016, it was $947,553. That’s an increase of $383,841, or in percentage terms, +68.1 percent.

RelatedDoes Affordable Housing Cause Bay Area Rents Skyrocket?

Of Brooklyn’s meteoric decade, Miller said, “That had to do with the market skewing more luxury. It’s not super-luxury like Manhattan, but the market essentially reinvented itself from what was formerly a cheaper alternative to Manhattan to a competitor of Manhattan.”

Manhattan wasn’t too far behind, increasing by $833,058 ($1,306,095 to 2,139,153), a rise of +63.8 percent. Although Brooklyn stuttered a bit during the 2008 crash, with many properties in Bed-Stuy and Crown Heights going into foreclosure due to subprime loans and exploding adjustable rate mortgages, generally other parts of the borough weathered the storm well.

In Manhattan, things hit overdrive fairly recently in 2014. “The peak was pre-Lehman, and that threshold was not reached again until almost seven years later,” said Miller.

RelatedFive Pros And Cons Of Renting A Home To A Student

Things differ markedly in the Bronx with much of the area hit hard by the foreclosure crisis. In fact, the borough’s 2016 average price $393,323 is lower than it’s 2006 high of $407,936, a drop of -3.6 percent. The Brick Underground classified the numbers as misleading, saying, “the last month of 2006 was higher than any other month before or after. The first quarter of 2007, for example, saw an average price of $391,050, which would mean that the 10-year difference was +$20,000. The problem, says Miller, is that “they didn’t have a luxury development boom to get them back” after the market went bust post-Lehman meltdown.

Queens had a rough time time during and immediately after the financial crash with foreclosures and predatory lending hitting poor, minority neighborhoods particularly hard. In fact, as recently as last year, families in Jamaica, Queens were still feeling the ill effects of the crash eight years earlier and struggling to keep their homes. There was a net increase in house prices of +$93,578 in 10 years ($479,877 to $573,455), a +19.5 percentage gain). Queens is a diverse borough. While certain neighborhoods have struggled, others, such as Long Island City, Sunnyside and Jackson Heights, have flourished, leading a new wave of  NYC gentrification recently.

“Most of Queens’ growth has occurred in the last two years,” says Miller. “And most of that is because of the Northwest region’s luxury development (though most of that is rental). But I think the bigger issue is what I call ‘Brooklyn spillover.’ Brooklyn is at capacity.”

The numbers make a good case for buying in Queens and the Bronx which have a way to go to catch up to Brooklyn. However, with brownstones in short supply and some renovated townhouses in Bed-Stuy now being listed for close to $3 million, Brooklyn, at least in some quarters, shows no signs of slowing down.

Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

ABOUT THE AUTHOR Jeff Vasishta

Jeff is a writer, husband and father but not necessarily in that order. As a music journalist he counts Prince, Beyonce and Quincy Jones amongst those he’s interviewed. He's also owned and flipped homes in Brooklyn, NJ, CT and PA.

  • AGORAFY
    Stefano Boeri, the architect mastermind behind the famous plant-covered skyscrapers, is now designing Forest Cities in Liuzhou, China. #ForestCity #China https://goo.gl/PsTUwv
  • AGORAFY
    Auction is the second scheduled in a month for a One57 unit and it could set a NYC foreclosure record. #BillionairesRow #Foreclosures https://goo.gl/NZ3zqD
  • AGORAFY
    Once a couch-surfing website, Airbnb moves on to luxury properties, further disrupting hospitality industry. #Airbnb #Luxury https://goo.gl/7TpLk6
Four Countries To Retire In With $200K In Savings—And How Much Real Estate Costs There
Ever dreamed of retiring abroad? You know, affordable healthcare, better climate, more positive news—becoming an expat seems like an enticing option, especially one you no…
While Other Real Estate Platforms Start Charging Agents $3-Per-Day Exposure Fee, Agorafy Remains Accessible To All
Real Estate searching platform are always finding news ways to diversify their revenues models. Case in point—on Tuesday July 18, Streeteasy, one of New York…
Is Real Estate Crowdfunding The Fix That Urban Housing In America Really Needs?
Saving money for a down payment? One can only hope. Most millennial in their twenties or thirties are mortified that they might never be able…
Brooklyn And Queens’ Real Estate Sub-Markets Continue Their Ascent To The New Heights
So, the sales prices in Brooklyn and Queens hit record highs. Again. Just like they did in December 2016 and at the end of this…
The Economy Of Car Services And Delivery Apps Might Be Making NYC Less Eco-Friendly
Living in an eco-friendly neighborhood is a good thing. And, as it always the case with the good things, it also costs more. High rents…
Building Communities: What The U.S. Developers Should Learn From Soho China
As our world emerges into the new period of globalization and technology, some of the most important by-products of this process are buildings that have…
Five Reasons Why All Entrepreneurs Must Keep Their Eyes On China
It is hard to overestimate the importance of Chinese influence on the modern global economy. Carving out a place in Chinese market and winning over…
Airbnb Up Their Game With A New Luxury Tier Featuring Mansions And Villas
Airbnb is about to seriously up their game. First, the company started testing a new service called Select in an attempt to push accommodation listings…