Despite being the most populous borough, Brooklyn long lived in the shadow of Manhattan. The latter represented the wealth, power, and cultural center, with Brooklyn a long-forgotten outpost. Even in the minds of her residents, the “city” referred to Manhattan.
However, Brooklyn has seen a revitalization over the last several years. It has become “cool and hip,” with people flocking to live in the borough. In fact, the U.S. Census Bureau estimates that Brooklyn’s population growth from April 2010 to July 2015 outpaced the other four, both in percentage and absolute growth. Brooklyn saw an influx of more than 132,000 people, growing 5.3% to 2.6 million.
Overall, Brooklyn’s housing metrics were stronger in the second quarter. Closed sales of condos and co-ops grew 17% compared to a year ago, to 1,459. Inventory was down 23% to 1,723 units, and months of supply fell 25% to 3.8. Prices reflected these stronger statistics, with the median price up 27% year-over-year to $760,000. Corcoran credited this to a strong new development market as buyers were looking at the limited supply of resale properties.
With that in mind, many neighborhoods have gone through gentrification, but not all Brooklyn neighborhoods have seen a revitalization. We rank the Brooklyn neighborhoods by price appreciation over the last year, based on the percentage increase in the median price, using data from The Corcoran Report.
1. Brooklyn Heights, Cobble Hill, DUMBO, Downtown: +24% (median: $1.24 million)
Sales increased 38% versus second quarter 2016, to 211. Inventory fell 13% to 196, and days on the market was down 5% to 64. New development sales were strong, and the average condo price was the highest on record. In fact, the condo market metrics were markedly stronger, and prices are the most expensive versus the other parts of Brooklyn.
The median sales price for a condo was $1.7 million, 30% higher, while it was $775,000 for a co-op, a 26% increase.
2. Bedford-Stuyvesant, Crown Heights, Lefferts Gardens, Bushwick: +21% (median: $691,000)
The price increase came about despite a 2% decrease in the number of sales, to 89. However, this was attributed to lower inventory, which was down 34%, to 95. Average days on the market did increase to 91 from 86, though. This could indicate buyers are becoming more cautious in the face of rising prices. The condo market was strong, with the median price up 23% to $716,000, while the co-op price fell 2%.
3. Fort Greene, Clinton Hill, and Prospect Heights: +20% (median: $880,000)
The price increase comes as inventory shrunk 8% to 152. Despite fewer units on the market, sales grew 40% to 224. The increased activity was attributed mainly to new developments. The market was skewed towards higher-end properties, with the average price of co-ops and condos increasing more than the median price. The median price of co-ops rose 5% to $677,000, while the average price increased 6% to $735,000. The median price for a condo was up 1% to $900,000, while the average price was 8% higher, reaching over $1 million.
4. Carroll Gardens, Boerum Hill, and Red Hook: +18% (median: $1.29 million)
Sales were down to 90 compared to a year ago when it was 97 units. Inventory ended higher, at 72 versus 62. The condo market was much stronger than for co-ops, with the median price up 24% to $1.43 million. Simultaneously, it was down 13%, to $855,000 for co-ops. A new condo development at 345 Carroll represented a disproportionate share of sales, helping boost the price.
5. South Brooklyn: +11% (median: $354,000)
This was a mixed bag, despite the increase in price. Sales expanded 13% to 489, which was largely credited to new development closings. The average days on the market was 106, the longest period compared to Brooklyn’s other neighborhoods, and an increase from 90 a year ago. The median price for a co-op was 10% higher, to $287,000, and increased 11% for a condo, to $583,000.
6. Williamsburg and Greenpoint: +10% (median: $970,000)
The Williamsburg and Greenpoint area had a strong performance, with sales rising 39% to 193. Inventory is down, too, by 13% to 308 units. The days on the market did increase to 75 from 57. The median price of a co-op was essentially flat at $381,000, while it was up 10% for a condo, to $980,000.
7. Park Slope and Gowanus: +6% (median: $997,000)
This area had an interesting dynamic. Sales fell 10% to 92, and inventory was 47% higher, to 150 units. However, the median sales price rose 6% to $997,000, and the listing was on the market for 53 days on average, the fewest of any area in the borough, and down from about 55 days.
The inventory increase largely due to several new developments, including condo conversion. The co-op market outperformed the condo market, with the former’s median price up 25% to $925,000. Comparatively, the median price for a condo fell 6% to $1.21 million.
8. Kensington, Windsor Terrace, Ditmas Park, Flatbush, Prospect Park South: +6% (median: $500,000)
Sales were down 4% to 74, but that was mainly due to lower inventory, which fell from 204 units a year ago to 155. The units that were on the market went quicker, an average of 60 days versus 69 a year ago. This is evident in the price, which grew 6%. Broken out, the condo market experienced a strong 30% increase to $760,000 while co-ops saw a 2% rise, with a median price reaching $462,000.
It is worth remembering the old adage that past performance is no guarantee of future results. Still, at the very least, analyzing which Brooklyn neighborhoods have experienced the greatest price appreciation allows you to better understand the market dynamics and prepare you as you undertake your search.