Study: Robust Demand Drives Up Brooklyn Real Estate Prices

By: Jill Urban

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New development in Brooklyn is one of the hottest sectors of the real estate market, according to the latest report by the brokerage firm MNS. NY1's Real Estate reporter Jill Urban filed the following report.

A few years ago, residential development in Brooklyn was at a standstill. Now, Brooklyn’s new development market is hotter than ever, according to a new report released by brokerage firm MNS.

MNS Report On Brooklyn Development

View the full report.

"There's not a lot of inventory left on the market. As of now with everything that is on the market, you have about three to six months of inventory left on the market," said MNS CEO Andrew Barrocas.

Barrocas says as inventory decreases, prices are climbing. The report finds that prices for units in new developments increased about 15 percent since this time last year.

"Prices overall in Brooklyn have increased. For example, in Williamsburg the average price per square foot from the end of 2010 to end of 2011 increased $102. The largest increase that we saw were the units in excess of 1,500-square-feet where we saw the prices increase $253 per foot," says Barrocas.

Neighborhoods like Park Slope, Brooklyn Heights and Greenpoint saw a boom in the number of sales but the highest increase in the borough was in Williamsburg.

"Fourth quarter, they sold 580 new developments in Williamsburg in large part because the area had a lot of inventory and large buildings, and a young hip area that is certainly in demand," says Barrocas.

It seems the biggest demand is in larger units like two- and three-bedroom units. There have also been a record number of combo units created.

According to the report, now is a good time to look for a one-bedroom unit, because they make up 50 percent of the remaining inventory and they sell at half the pace of larger units.

So with prices going up and inventory going down, what does MNS see for the future of new development in Brooklyn?

"What I see for 2012 is the remaining condo inventory being absorbed in the next three to six months," says Barrocas. "Most if the new inventory coming to market will be rentals which will only drive the sales prices up even more and people looking for new development are going to have to buying off a floor plan as they once did."