There aren’t many places in the U.S. where people are unfazed, even titillated by the possibility of living next door to monster rats, but apparently Manhattan is one of them. Yesterday the Douglas Elliman Real Estate Report revealed that apartment sales in Manhattan have reached a level not seen since before the start of the Great Recession. The report states that sales were up 18.8 percent in the second quarter of 2013 over last year’s second-quarter numbers, with over 4,000 new contracts signed between April and June.
The logical next question is, who is buying what kind of homes? The short answer is exactly what you might expect: the wealthy seizing on the luxury home sector, which now dominates the market in New York’s richest borough. But before anybody gets too smug, the fact is that, both Queens’s and Brooklyn’s markets are increasingly luxe too.
Median sale prices for homes in Brooklyn in the second quarter of 2013 were a monstrous $515,000, just shy of the all-time record of $540,000 back in late 2007. Analysis in the report suggests that the biggest factor influencing the price bump is the increasing scarcity of places to live across the borough.
An alarming reality is that though housing is scarcer in some Brooklyn neighborhoods than in some parts of Manhattan, there is plenty of undeveloped land in some of sections of the borough. Borough President Marty Markowitz is on the record as opposing rezoning parts of North Brooklyn from industrial to residential, despite heavy industry’s exodus from Bushwick and Williamsburg decades ago.
Even if new development comes to Brooklyn to ease the scarcity problem, it might actually make the problem worse: According to the report, the bloat is linked to the development of luxury apartments outpacing the growth in housing supply at the low end of the price spectrum, and that’s only expected to continue as real estate agents keep concocting bonkers cash grabs like dreaming up the new neighborhood “Parkwanus.”
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