The choice used to be an easy one. Those who could afford it chose the city. Those who wanted more space for their bucks chose the lower borough. That is no longer true these days. With sale prices and especially rents rising sharply in Brooklyn, many home-seekers are finding that popular Brooklyn neighborhoods no longer come at the discount they’re expecting.
Let’s look at rentals. The June issue of The Real Deal analyzed market data and found that rents have been rising much faster in Brooklyn than in Manhattan, significantly narrowing the pricing gap between the two boroughs. In March, the median rental price for a one-bedroom apartment in prime Brooklyn neighborhoods jumped 11.3 percent from the same month of last year, according to Prudential Douglas Elliman’s report. By contrast, the median rental price for Manhattan rose by 6.7 percent.
When it comes to sales, there is no longer a dramatic price difference between many Brooklyn neighborhoods and comparable areas of Manhattan. According to StreetEasy, the median asking price for a Brooklyn Heights apartment has risen 37.8 percent in the past five years to $792,500 while the median price in the West Village rose by only 4.34 percent during that same period, to $895,000.
Additionally, Elliman’s data shows that in the first quarter, the median sales price for a Brooklyn apartment shot up 14 percent year-over-year, while the median price in Manhattan rose just 5.9 percent. And at least one popular Brooklyn neighborhood, Williamsburg, is now more expensive than the Lower East Side.
The city’s current inventory shortage — available Manhattan listings fell by 34 percent year-over-year in the first quarter — has accelerated the shrinking price gap between the two boroughs, as would-be Manhattan buyers widen their search to include Brooklyn.
That said, one area where there are still significant discounts in Brooklyn versus Manhattan is at the very high end of the market. In other words, the difference in cost between townhouses in Brooklyn Heights and townhouses in the West Village is still pretty significant.
On a side note, as I mentioned in previous articles, I think that Harlem (a section of Manhattan) represents an extremely good opportunity to buy/invest since the price differential, if compared to the rest of the island, remains very attractive at the moment.