2 November/3 November 2019 ★ FT Weekend 3House Home
US propertyBrooklyn’s
relentless rise in prices iseasing and the market is
finally shifting in favour ofbuyers. ByHugo Cox
H
ilarie Sheets has had a
nerve-racking year. While
selling her deceased
father’s home in the Upper
East Side of Manhattan,
she had to drop the sale price three
times before completion. At the same
time, she was trying to buy a three-
bedroom home in Brooklyn.
“As we’re watching the Upper East
Side plummeting, the Brooklyn market
was staying resilient. Although it was
starting to shift in favour of buyers, good
homes were selling fast,” says the 55-
year-old, an art critic and “life-long New
Yorker” who grew up in Manhattan.
Sheets kept up her search, partly
because falling mortgage ratesmade a
purchase appealing. She is now waiting
to complete a deal on a three-bedroom
house in Windsor Terrace — enough
room for her, her husband andvisits
from grown-up children.
Prices in Manhattanare falling faster
than at any time over the past decade.
But over in Brooklyn, Sheet’s hunch that
the market isalso shifting in favour of
buyers is reflected in the data. Sales vol-
umes fell 10.4 per cent in the three years
to September, according to Douglas Elli-
man, a local agent. Mean prices have
fallen 2.2 per cent over the period.
“Brooklyn tends to follow Manhattan.
It managed to stay afloat for a while but
in the last six to nine months, we’ve seen
the reckoning,” says Brooke Joslyn, an
agent at the Stribling office in Boerum
Hill, Brooklyn.
The forces are similar to those in Man-
hattan, she says: too many homes for
sale, foreign buyers fleeing and domes-
tic buyers concerned about tax changes
and affordability. The revamped man-
sion tax imposes a levy on home pur-
chases that rises from 1 per cent on
properties worth more than $1m to
3.9 per cent on properties sold for more
than $25m.
“A reckoning” was not exactly what
Sheets experienced. In the end her
home in Brooklyn went to a bidding
war with 16 other offers. “But this
was because it was really attractively
priced, and beautifully renovated,” she
says. She thinks the shift to more Brownstone house, $6.9m— Zoe WetherallBrooklyn’s new developments. But
with prices in Manhattan falling further
than in Brooklyn, that discount has
narrowed. Now, many are crossingback to Manhattan neighbourhoods
such as the Lower East Side, where
price falls have brought homes back
into budget.
“It used to be that you would save
money on your maintenance costs and
property taxes in Brooklyn, but that
isn’t the case any more with these water-
side developments. Those looking for a
pied-à-terre are now prepared to spend
an extra 10 per cent on something in
Lower East Side, to be in Manhattan,”
says Joslyn.
Sheets had no plans to cross back
to Manhattan: “We weren’t fixed on a
single neighbourhood but we wanted
that Brooklyn feeling: beautiful old
homes, the garden, the informality,
the small-town feeling, dining al fresco
in good restaurants, the younger070020701007020
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Dumbo Williamsburg
MANHATTAN
km
BROOKLYN
QUEENS
BRONX
maps news.com/©HERE
NEW YORK CITY
maps news.com/©HERE 5km
families bringing that vibrancy. It’s the
best synthesis of city and suburban.”
In Clinton Hill, Compass is selling
a two-bedroom
apartment in a
converted brown-
stone for $1.2m.
On Park Slope the
same agent is sell-
ing a three-bed-
room period apart-
ment with a gar-
den for $2.9m.
Sheets steered
clear of those types
of brownstones —
large Brooklyn ter-
raced homes reno-
vated by develop-
ers into standalone homes or split into
apartments. “A lot of developers were
buying up homes in gentrifying hoods. I
felt these things were wildly over-
priced,” she says.
Not all brownstones have been devel-
oped. Leslie Garfield is selling a five-sto-
rey brownstone with five bedrooms on
Hicks Street for $6.9m. Corcoran is list-
ing a five-bedroom townhouse on
Amity Street for $6.4m.
Thanks to the fading appeal of New
York for foreign buyers, many investor-
developers are now pulling out of
Brooklyn, says Joslyn.
“All this plays well for [individual]
buyers, who are feeling more powerful.”
That means bidding situations like the
one Sheets found herself in this year are
less likely.
i/B U Y I N G G U I D E
Homes in Brooklyn sold for more than $1m
are subject to a 1 per cent mansion tax
increasing to 3.9 per cent for homes sold
for over $25m.
On a good day, the taxifrom Williamsburg
to JFK airport takes half an hour
Regular flights connect JFK airport to
London in about seven hours and Los
Angeles in about six hours
What you can buy for...
$500,000 one-bedroom co-opA
apartment in Williamsburg
$1.5m newly converted two-bedroomA
apartment in a brownstone in
Greene Park
$5m six-bedroom period townhouse inA
Park Slope
More at propertylistings.ft.com
reasonable prices has been concen-
trated among homes sold by individual
owners, rather than new or refurbished
propertiesbeing offered by developers
holding out for unrealistic prices. She
includes new high-rise condo buildings
that have sprouted along Brooklyn’s
western shore, notably in Williamsburg
andDumbo.
“They tended to be very overpriced
and a bit boxy,” she says. Besides, the
annual ownership costs were very high.
Local agent Douglas Elliman is selling
a four-bedroom duplex with river views
in theEsquire Building in Williamsburg
for $3.9m.
Buyers sense that riverside condos
are overpriced, says Joslyn. In the
past, Manhattan price rises pushed
many buyers across the East River to
Brooklyn street next to the Williamsburg Bridge; (right) five-storey townhouse, $6.45m —Getty Images/iStockphoto
Bridge the gap
NOVEMBER 2 2019 Section:Weekend Time: 10/201930/ - 17:47 User:elizabeth.robinson Page Name:RES3, Part,Page,Edition:RES, 3, 1