Let’s start with this: Brooklyn is not only a super-hot market, but it is now producing inventory of a quality and price point that rivals all but the very top of the high end in Manhattan. Consider this listing:
At $4,300 per square foot, it is still a far cry from 220 Central Park South’s eye-watering $10,000 per square foot prices. Nevertheless it is a sign that developers believe there is demand for this product.
Furthermore, let’s not forget the Wall Street effect:
Wall Street had a tremendous year in 2021, and those bonuses are trickling into real estate now. Remember that not all Wall Street employees are masters-of-the-universe types, and that the average pay for a Wall Street employee is over $400,000. That leads lots of risk managers, executive assistants, tech professionals, etc., with healthy annual compensation – and a lot more of it is coming to Brooklyn. Let’s not even start with the technology industry employment – which is also up big.
As you can see from the chart above, demand has eaten away at supply in Brooklyn, and while we are not at all time lows of supply it is still historically very, very low.
Prices also continue to rise, with the median Brooklyn prices setting all time highs in the 4th quarter of 2021.
The outlook for Brooklyn in 2022 is strong. Rising rates are ho-hum news, with a huge proportion of deals over a million dollars done for cash. Remember this, lack of supply (our current problem in Brooklyn) will trump slightly higher monthly costs. Expect prices to go higher and a very active buyer’s market in the spring. Buyers beware, the proportion of deals going to bidding wars is now over 25%, a proportion we haven’t seen in years.
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