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Manhattan: The New Brooklyn?

As the market hints at a downturn, Brooklyn brownstones sit unsold.

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Conventional wisdom holds that outlying neighborhoods’ prices are last to rise and the first to suffer in a downturn. Well, that downturn is here, and the numbers in brownstone Brooklyn are showing signs of strain. Statistics from Streeteasy.com show 38 percent of townhouses suffering price cuts in recent months, averaging an 11 percent drop. Six of ten listings in Prospect Heights have been marked down, as have a third of the listings in Brooklyn Heights, Carroll Gardens, and Park Slope. Median sales prices for one-to-three-family houses fell 3.4 percent from the prior quarter, and transaction volume dropped nearly 27 percent, according to appraisal firm Miller Samuel. Though the market is “very much alive,” longtime broker Peggy Aguayo admits, the pace “is slower,” especially when it comes to single-family homes.

Why? Brooklyn prices have risen nearly to parity with Manhattan’s, many of them so ambitious that a lot of buyers say they may as well look across the river. Predicts veteran agent Rick Wohlfarth, who’s seen the market cycle numerous times: “You’re going to see people who were looking in Brooklyn coming back to Manhattan.” Adds broker Shaun Osher: “The lower part of Manhattan’s price points went to the upper part of Brooklyn’s, where many brownstones sit.” Jed Garfield, another townhouse specialist, agrees: “Brooklyn looked like the great frontier, but there’s geographical realities, and when you see softening in Manhattan, buyers suddenly have a choice.”

So why isn’t it cratering altogether? Because Brooklyn now has its own momentum. There are far more pro-Brooklyn partisans than there used to be, creating what Aguayo calls a healthy “micro-market.” Until recently, 60 percent of her clientele hailed from Manhattan; that number’s now down to 45 percent. Corcoran’s Frank Percesepe says one developer planned to heavily recruit Manhattanites because of his project’s high price points, but “the majority of our clients were from Brooklyn … Once people get here, they like it.”


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