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Brooklyn’s Price Tag Goes Through the Roof

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In today’s Brooklyn real estate market, anyone who already owns their home, can pay their mortgage, kick back and enjoy the ride. Or perhaps with the equity they have earned, upgrade their home. But with property-price hikes of 35 percent or more since last year, first-time buyers not earning Manhattan wages can forget about it. Well almost, but affordable neighborhoods are evaporating fast. Sale prices in once inexpensive Fort Greene for example, leapt by 82 percent in just one year from $250,000 to $456,000 in 2005 – making it comparable with other top-dollar neighborhoods. Prices across Brooklyn increased to an average of $478,000, according to the Real Estate Board of New York (REBNY), Residential Sales Report 2005. Brooklyn Heights, Cobble Hill, Park Slope and DUMBO rate amongst the highest-priced neighborhoods in the borough. “The increased sales activity and surging apartment prices demonstrate a booming market,” said Steven Spinola, president of the Real Estate Board of New York (REBNY), who spoke at the launch of their first annual report at the Marriot Hotel at 333 Adams Street on Feb. 7. But Spinola acknowledged that the double-digit growth could cool somewhat in 2006. Just don’t expect prices to drop. “This is clearly a positive sign for the borough and I don’t see any indication at all that there is any weakening in the market. It is a clear, positive statement for the Borough of Brooklyn,” Spinola said. Michael Slattery, senior vice president of research at REBNY agreed, saying that slowing is part of a natural cycle that follows a very heated market. “I don’t see there has been any softening,” Slattery said. “The rate of appreciation seems to have abated somewhat. The rate we have seen before probably was not sustainable for a too longer period of time. Twenty five percent growth in a year is a pretty healthy growth. You can’t expect to see that year in, year out.” Councilmember Leititia James says she welcomes the buoyant market, but is concerned about affordability in her district. “Fort Green is hot and that is great,” said James. “However, there is a downside and that is market forces are resulting in businesses as well as residents being displaced. I am seeing great evidence of that bad force.” She says that her office is working with non-profits to provide affordable housing and encouraging developers to include housing for low- and middle-income households, when they request zoning variances. The report was compiled from information supplied by condos, co-ops and brokerage firms borough-wide. The average apartment costs around $1.26 million in DUMBO, according to the report. Apartments on average cost $753,000 in Cobble Hill, $638,000 in Vinegar Hill, and $622,000 in Park Slope. Neighborhoods with average apartment prices between $500,000 and $600,000 included Boerum Hill, Carroll Gardens, Brooklyn Heights and Prospect Heights. More affordable properties are still available in Bedford-Stuyversant, Downtown Brooklyn and Prospect-Lefferts Garden. Prices for one- and two- family homes increased on average by 21 percent to $530,000 in 2005. One- and two- family house cost on average more than $1 million dollars in Brooklyn Heights, Boerum Hill, Cobble Hill and Park Slope. One- and two-family homes averaged $2.7 million in Brooklyn Heights, $1.6 million in Cobble Hill, $1.3 million in Park Slope and Boreum Hill, and $1 million in Carroll Gardens The report was designed to provide a little more science to what for many real estate agents and brokers is something of an art, based on local knowledge, anecdotal evidence and hunches. The report may also help brokers be more confident about that information when they advise clients, Spinola said. “Now there is independent confirmation of information that they had, so they can go to their clients and say with confidence ‘here is the data and this is what you may realistically hope for if you are selling your apartment or what you might have to pay’,” said Spinola.

Posted 7:06 pm, October 10, 2011
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