Is Brownstone Brooklyn Heading for a Bubble?
The scarcity of townhomes in "brownstone Brooklyn" has led to a sharp increase in asking and sales prices. Now homebuyers may not find the value they’re expecting, warns Ideal Properties Group co-founder Aleksandra Scepanovic.
With Barclays Center in full swing and excitement building in surrounding neighborhoods, brownstone Brooklyn’s townhome market is “out of control,” Aleksandra tells us. “Many buyers today have this skewed idea that anything you purchase will build equity quickly,” spending $2M on a property that was only valued at $750k last year, then expecting it to be worth $3M next year. “But we’re not even remotely sure that next year will see even a 20% growth.”
Ideal sold a two-family townhouse at 393 Sterling Pl in Prospect Heights (above) for $3.3M this year, and even at that price, there was tremendous interest, she says. Two years ago, the property might have commanded only $1.7M to $2M.
One group showing increased interest in brownstone Brooklyn is Manhattanites: An Ideal Properties report found that 17% of renters came from Manhattan in Q2, up 4% from the last quarter, a number Aleksandra expects to increase. They’re also coming here to buy, but at these inflated numbers and not enough condo product in the pipeline, they’re turning to neighborhoods like Bed-Stuy, Bushwick, Prospect-Lefferts Gardens, and Gowanus, she says. Ideal recently brought to market the four-unit 120 Hart condo building in Bed-Stuy (above), and the building’s four units range from $750k to $950k. The first open house was full—despite the project launching in late August, she says, a traditionally slow month for sales in the area.
Both Aleksandra and her partner are brokers, and their 3-year-old daughter has already picked up the negotiation bug, as seen at her birthday party this summer. Aleksandra says it was supposed to be a Peppa Pig-themed shindig, but her daughter insisted on weaving in The Beatles' “Yellow Submarine.” (“I don’t even know where she picked that up as a favorite song,” she laughs.)