Amid Soaring Brooklyn Rents And Prices, There Is Trouble In Paradise With Rising Foreclosures
The disparity in Brooklyn couldn’t be greater. The divide between the have’s and the have not’s plays out in a striking new report.
The data boffins at Property Shark have been crunching numbers regarding the always fascinating Brooklyn and they’ve found some interesting information. The borough, as analyzed in Brownstoner and Rent Café, is undergoing something of an identity crisis. As certain neighborhoods become even more expensive with house prices and rents soaring, the disparity with others that can’t keep up is growing. Thus, while renters earning over six figures are populating places like Williamsburg and Greenpoint, other parts of town have seen a spike in foreclosures.
Here are a few of the standout facts.
- In a worrying echo of the housing crisis, the number of new foreclosures has more than doubled over the last five years, from 176 homes slated for auction in 2012 to 417 in 2016. Worst hit areas for foreclosures are Canarsie, East New York, East Flatbush and Flatlands in Eastern Brooklyn.
- The price gap in homes between the wealthy northwest and poorest eastern areas is around $700,000.
- Biggest gainer among zip codes is Prospect Lefferts Gardens, which jumped from 27th (amongst 37 zips) to 9th in five years, adding around half a million dollars to the median ($780,000) sale price.
- Prices in Williamsburg and Greenpoint increased 86 percent in five years.
- The number of renters making over $150,000 increased by a mighty 324 percent since 2011. You guessed it, most are in the hipster-centric Northwestern part of town.
Much of Brooklyn has seen dramatic price gains, particularly in Brownstone neighborhoods such as Crown Heights and Bedstuy—along with Bushwick and Red Hook. Property Shark’s numbers are echoed in reports from numerous real estate data teams. Trulia shows median sales price in Crown Heights as increasing by over 80 percent from $631,315 in 2011 to $1050,000 in 2016. Bedstuy, which has less uniformed tree-lined brownstone blocks that Northern Crown Heights, showed a similar percentage increase in Trulia data from $425,880 in 2011 to $712,550 in 2016.
The Washington Post’s number crunching is even more dramatic, showing that the 11216 zip code, which covers part of BedStuy and 40 blocks of Crown Heights, increased a jaw dropping 194 percent since 2004. That’s the largest gain out of any area in the country’s 300 largest cities. And Rent Cafe shows that wealthy renters are now moving to Bushwick, Bed Stuy and Crown Heights from their northwest Brooklyn hub.
According to the yearly Douglas Elliman report, the median sales price hit $750,000—15.4 percent higher than last year and a new high for the borough of Brooklyn.
“We’ve seen median sales set a new high four times in the last two years,” says Jonathan Miller, who prepared the report. Overall, he says, there’s “lots going on” in the Brooklyn market these days, including rising prices, falling inventory, and more sales in general.
Halstead’s fourth quarter Brooklyn report, found similar numbers. The average apartment reached a record high of $834,944, while average townhouse prices hit a new high of $1,046,951.
The foreclosures in poorer parts of town do send a troubling ripple amongst all the good news for Brooklynites. It means that homeowners are unable to pay their mortgages. It’s usually down to a few common issues: Either they have lost their jobs, the tenants aren’t paying or they have taken out lines of credit against their primary residence, spent foolishly and now are struggling. It’s a scenario many know only too well.