Despite the global pandemic effects on the NYC real estate market, the development fundamentals thus far in 2020 in Northern Brooklyn has proven to be a glimmer of hope for this city. The neighborhoods of Greenpoint, Williamsburg, Bedford Stuyvesant, and Bushwick have shown that there is still very strong demand from both NYC residents and developers to be in those neighborhoods.
Newly constructed residential condos (built 2015 and after) sellout prices have been the main driver for land values in Northern Brooklyn in recent years. Residential condos prices post lockdown (3/17/2020) in Northern Brooklyn stayed on par with Pre COVID sellouts. This can be attributed to the fact that condo buyers’ preferences have changed due to the recent pandemic. People might be social distancing and quarantined for longer, so buyers are looking for condos in neighborhoods that are less densely populated and have more open space. In addition, they are looking for bigger units and better value for luxury amenities compared to Manhattan. As a result, condo buyers have been looking towards Brooklyn where you can find newly constructed condos and neighborhoods that fit these criteria. This is reflected in the year over year difference of the number of condo contracts in the month of July. Douglas Elliman reports that, “the numbers surged: 178 new condo contracts in July, up from 147 last year.” The demand for Brooklyn condos is reflected in recent sellout values of newly constructed condos.
In East Williamsburg where the neighborhood average condo sellout value during the pandemic averages out at $1127.62 which is only a -.345% decrease in price from $1131.52 pre COVID. North Williamsburg average condo sellout during the pandemic has been at $1,382.37 vs $1,397.42 which is only a -1.08% decrease. South Williamsburg on the other hand saw $/Sf of condos increase 2.21% from $1364.09 to $1393.66 during the COVID pandemic. Greenpoint saw the biggest price increase on $/SF of new condo sellouts from $1128.62 to $1218.78 during the pandemic. The average condo sellout in Bedford Stuyvesant in 2020 has been $865.43 with 57 sales this year. This time last year Bedford Stuyvesant was at a slightly higher pace with 62 sales at $876.28/SF. The average condo sellout this summer in Bedford Stuyvesant has been at $812/SF with 11 sales which looks to be signs of a slowdown. Bushwick has seen 35 newly constructed condo sales this year averaging out at $858/SF. In 2019 the average $/SF at this point in the year in Bushwick was $842.57 with 46 trades. A 1.83% uptick in value and -22% drop in activity. This summer in Bushwick there has only been 4 new condo sales with an average sellout value of $850/SF.
New condo buying preferences brought on by COVID-19 has also impacted the type of units people are looking for in Northern Brooklyn. In 2020 compared to 2019 there has been more demand for units with 3-4 bedrooms. This can be attributed to people wanting more space in order to convert extra bedrooms to home offices and more families looking to purchase in Northern Brooklyn as a less pricy alternative to Manhattan. 3-Bedroom apartments in Northern Brooklyn saw a 14% increase in condo $/ SF sellout value from 2019 to 2020. 4-Bedroom units saw a 4% increase in $/SF sellout value. Williamsburg saw a 2% increase in value from 2019 to 2020 for 3 Bedrooms and a 9.5% increase in value for two bedrooms. The amount of 2 bedrooms purchased in Williamsburg more than doubled in 2020 from 3 transactions in 2019 to 8 in 2020. Greenpoint remained a market mainly dominated by one-bedroom condos with 28 transactions in 2020.
The average price per buildable in prime Williamsburg in 2020 was $495/bsf with 5 sales taking place so far this year. All but one sale happened before the COVID-19 lockdown in March. Greenpoint on the other hand has seen 9 development site trades. The average $/BSF in Greenpoint for residential development sites in 2020 was $400.46/BSF and there have been 4 development site trades during the pandemic that averaged out to $382/BSF. East Williamsburg has seen 6 development site trades thus far in 2020. 3 of them were bought in bulk by developer David Bistricer back in January for a combined $392.55/BSF. The average $/BSF on the year thus far in 2020 is $362.53. Bushwick saw 17 development sites trade so far in 2020 averaging out at $196.62/ BSF. Only three of the development sites that traded in 2020 happened during the pandemic with the average of $153/BSF, a decrease over 20%. There have been 14 development site trades in Bedford Stuyvesant with the average $/BSF at $200.47. Post lockdown the neighborhood saw 4 development site trades averaging out at $226.21/BSF, a slight uptick in value because of development sites traded on retail corridors near Fulton Ave.
Rental market has yet to be determined as developers and property owners of newly constructed buildings scramble to give out concessions to keep rents on paper of where they were pre-COVID. There has been a lot of reports of rent increases for units that have amenities such as terraces and outdoor space. Going forward Brooklyn developers are positioned to capitalize on an increased demand for newly constructed Brooklyn residential units due to the impact COVID-19 has on NYC residential preferences.