The number of Brooklyn brownstones on the market is increasing as the mom-and-pop brokerages that traditionally dominated the borough take a back seat to larger firms that are garnering higher prices for these highly sought-after properties. International buyers and others who previously might have only looked in Manhattan are now riding the wave to Brooklyn and scooping up reconditioned brownstones, helping to drive prices up. Longtime owners are seeing what their properties are worth and don’t want to miss the boat. And buyers who are being priced out of the more traditional brownstone neighborhoods like Brooklyn Heights and Park Slope are heading to Sunset Park, Bay Ridge, Bensonhurst, Bedford-Stuyvesant and even East New York with a little elbow grease in their pockets. But the number of brownstones is finite. “There are simply just so many of them available, and the ‘original’ brownstones will not be built again,” said Aleksandra Scepanovic of Ideal Properties Group. Competition is fierce as buyers, many of whom have already lost a bidding war or two, go into battle stance. For more on the state of the Brooklyn brownstone market, we turn to the experts.
Licensed salesperson, Halstead Property
How competitive is the brownstone market right now?
Competition remains fierce for brownstones in what buyers consider ideal micro-locations, and definitely for those that are recently well renovated. We’ve [recently] seen several homes sell quickly and above the asking price in bidding wars. However, with the higher inventory, buyers are also taking more time to weigh their options, especially when there may be objections to location, width, layout or quality of renovations. Purchasers considering a purchase of $4 million or more on a townhouse do not expect to compromise. At a slightly lower price point, competition is higher — there’s a wider audience at $3 million and under — and buyers who are determined to buy a brownstone see themselves getting priced out. Many of these buyers have lost multiple bidding wars and are willing to be aggressive, so when something comes to market that meets their needs, they will bid early to win it.
How quickly are properties selling today?
There are more townhouses that have lingered on the market over the past six months, but I would argue that many were over-priced, not well-positioned or lacked a thoughtful layout or aesthetic. We spend quite a bit of time perfecting layouts, design details and marketing initiatives to ensure quick and successful sales.
What are some of the external forces affecting the townhouse market right now?
Brooklyn has become a destination for Manhattanites and foreign buyers alike who no longer see it as a second choice to Manhattan. For Manhattan buyers, Brooklyn prices and property taxes seem relatively cheap and they are willing to pay up for a property they love. We also see many foreign all-cash buyers moving to New York and exclusively considering townhouses in Brooklyn.
Are most townhouse buyers paying in cash or is it more common to finance?
We see a good mix of all-cash, heavy cash and financed deals. With historically low interest rates, money is extremely cheap to borrow, so many buyers with the means to pay all cash choose to finance some of their property. That way, they are more leveraged and can free up cash to invest or use elsewhere. Sometimes these buyers will initially purchase all-cash to win in a bidding war but then finance their homes post-close.
Tuesday, December 01, 2015