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Ingredients for a hot real estate market: lessons from Brooklyn

By January 16, 2015 One Comment

It’s that time of the year again, the time when Brooklyn brokers take a moment to reflect on the past 365 days and give a candid — if not long — shot at envisioning the 365 days ahead.

And 2014 was a big year for this particular borough: Pricing ceilings were shattered and myths debunked, and the real estate market picked up intensity with each passing day, its velocity improving and inventory convalescing from the years of drought.

Even the peculiarly dejected agree that the momentum gained by so-called brownstone Brooklyn’s townhouse market will continue into 2015 and break even more records.

The chauffeur at the wheel of the trend? The gaping disparity between supply and demand. It all started with Brooklyn’s position as a cheaper alternative to Manhattan.

At first, that was enough to attract the onlooker. Then the crowd. And then the serene tree-lined streets, resplendent townhouses, hip bars, and decadently urban lifestyle interlaced with street art, designer pickles and emu-egg mayo took on lives of their own and defined Brooklyn as the “it” alternative, the biggest jewel in the Big Apple’s destination crown.

Today, Brooklyn is the first choice. The borough has so thoroughly morphed into a kind of glamorized stereotype of hipster heaven that many are on the hunt for “the next Brooklyn,” prophesying (or wishfully hoping for) its incarnation in cultural geographies as distant as Perth. Yes, that Perth, the isolated city located on Australia’s west coast.

But back on this continent, Brooklyn is where it’s at. Yes, Brooklyn may be the least affordable housing market in the country (not Manhattan, mind you; it ranked third on the affordability scale), yet it’s still the hot spot — because it’s still Brooklyn.

Park Slope, Prospect Heights, Cobble Hill, Brooklyn Heights, Carroll Gardens and Boerum Hill will continue to be the darling neighborhoods for the townhouse-hunter financially unafraid of being the next record-holder in terms of money spent. And Gowanus, Williamsburg and Crown Heights, with their youthful artistic appeal, will continue to attract the renters and luxury condo buyers … and their moms and dads.

We will also continue to witness the push into neighborhoods previously not on the “hot map” of interest — cases in point include Kensington, Prospect-Lefferts Gardens and Ditmas Park.

Year in and year out, spring will mark the start of another strong sales season. Coming out of the winter hibernation, the volume of transactions actually coming to a close is expected to increase.

The retail leasing scene will continue to flourish within brownstone Brooklyn’s inventory limitations, pricing per square foot inching ever upward. With a number of new, attractive commercial corridors having taken form in the recent years (for example, Third Avenue in Gowanus and new commercial destinations in Crown Heights), the demand is higher than ever before.

Tech companies will continue to find homes in Brooklyn, and incubating startups are expected to mature here, too. In Brooklyn, tech is likely to find a talent pool rivaling both Silicon Alley and Silicon Valley — especially in the domain of marketing and design team members.

Restaurateurs have come to a conclusion that Brooklyn’s restaurant rows are as viable an investment as any of their counterparts in Manhattan. Therefore, more big-name chefs will come knocking at Brooklyn’s doors, further enriching the borough’s diverse and stimulating culinary offerings.

So where is the latest trend spot that’s guaranteed to captivate the nation?

All evidence points to this answer: It’s still Brooklyn.

Aleksandra Scepanovic is the managing director of Ideal Properties Group, a leading real estate firm specializing in premier brownstone Brooklyn neighborhoods.

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