July 1st 2014
Co-op prices shot up a whopping 71 percent in Brooklyn in the past year with Manhattan apartments rising 34 percent, according to real estate market reports released Tuesday.
The average price of co-ops in Brownstone Brooklyn, Williamsburg and Greenpoint spiked by more than $285,000 over the past year to $687,000, a report from Ideal Properties found.
The average price of Manhattan’s co-ops rose to $1.45 million, a Douglas Elliman report found.
Co-ops were still cheaper than condos. Brooklyn’s condos cost $1.08 million on average, while Manhattan’s condos averaged $2 million, the reports found.
“The co-op rise is partially attributable to people seeking out more affordability,” said Jonathan Miller, a real estate expert who authored Elliman’s Manhattan report. “Comparing apples to apples in terms of amenities, co-ops are competitive price-wise.”
Although there’s a crop of new development underway in Manhattan, these buildings are unattainable for many New Yorkers, real estate experts said.
“Even if you’re looking in the $2 million …range, there really are no new condos unless you buy a studio,” said Douglas Elliman’s president and CEO Dottie Herman.
“That’s pushed people to go to co-ops. If you look around, you probably can get a really good deal on the Upper East Side in a co-op.”
Bidding wars are often fierce for many of Manhattan’s smaller co-ops that are priced under $2 million, said Frederick Peters, president of Warburg Realty. There’s also frenzied competition for many “beautiful Brooklyn properties” — where inventory is even tighter than Manhattan.
It’s not uncommon to see 100 percent increases in value over the past four years in Kings County, he said.
“Homes that were sold for $850,000 a few years ago in similar places are now going for $1.5 million,” he said. In Brooklyn, “almost every property excites multiple offers, from the Heights and Williamsburg to Fort Greene, Park Slope, Windsor Terrace, Ditmas Park and even Bed-Stuy.”
That’s why Peters advises buyers looking at Brooklyn to be open minded.
“Be flexible about where you’ll go and what you’ll consider. If you can’t afford Brooklyn consider the Upper East Side,” he said, echoing Herman.
“Be willing to discover something other than what all of your hipster friends are doing.”
It’s only when buyers are looking for co-ops in the $3 million to $7 million range that they find less competitive bidding, he said.
Those properties might be snatched up in a matter of weeks or months — rather than days.
On the other hand, co-ops priced at $10 million and above often spend months and sometimes years on the market, Peters said.
“Many sellers continue to be influenced by the thriving market in new condominium sales, believing that those price levels can bleed over into the co-op market,” Peters said. “They can’t.”
Manhattan’s new developments reached a record price per square-foot of $1,900, Douglas Elliman’s report found.
But these sky-high prices have little bearing on the bulk of the market, many said.
That’s especially the case for co-op buyers, who tend to be different from condo purchasers.
“Co-op buyers tend to be local and more cautious,” Peters said. “They are not parking money like the Russian, Chinese, and South American billionaires who are buying the ultra-luxury condominiums, often from plans and often with no intention of using them for more than a few weeks a year.”
One bright spot for buyers is that inventory is up from a year ago, Miller noted. Unfortunately, however, what’s on the market may not be the nicest digs or priced right.
“After four consecutive quarters of record sales activity we’ve burned through a lot of good inventory,” he said.