As the epicenter of cool worldwide, Brooklyn practically sells itself. Trends emerge in the restaurants, boutiques, bookstores, and streets of this diverse, always-on-the-go borough, which more than 2.5 million people call home.
But if you want to own a home in Brooklyn, be aware that there’s really no such thing as “cheap” in this area, and even when markets have settled down in the rest of the country, buyers are still engaging in bidding wars in this perennially hot market.
The median price of a home in Brooklyn surged to just over $1 million in 2018, and from 2008 through 2018, housing costs in Brooklyn increased by 50%. In 2019, housing prices in the emerging neighborhood of Greenpoint increased by a median 12%, with neighborhoods much further south still offering median home prices for enviable homes significantly below seven figures.
For those who can afford the million-dollar-and-up properties, there’s an additional cost: a mansion tax of 1% of the sale price will be added to your closing bill. Needless to say, the competition to become a homeowner in Brooklyn is as fierce as the culture is cool.
We talked to experts in Brooklyn real estate, scoured all 66 (and counting!) neighborhoods, and did the math to find the best recommendations for your budget and lifestyle, putting them all together in this comprehensive guide to where and when you should be shopping, what you need to know about condos and co-ops, and how to make your offer as competitive as it can possibly be.
How to set a home shopping budget in Brooklyn
Brooklyn is renowned for being many things, but cheap isn’t one of them.
Ready to buy in Brooklyn versus rent? The math may help you feel prepared: The average rent in Brooklyn as of October 2019 was $2,956, with the average apartment size at 645 square-feet. And while the average home price is notoriously over $1 million in Brooklyn, there are plenty of listings below seven figures.
“The first thing I suggest to potential buyers is, if you’re paying rent in this city, go talk to a financial advisor and mortgage lender,” says Tonya Benham, a Brooklyn-based real estate agent who sells homes 43% more quickly than the average Brooklyn agent.
“A good lender will be OK if you’re not ready, and help guide how to get your ducks in a row for a future purchase.”
Median home prices in the area can be difficult to assess. Homes in the borough include:
- precious studio apartments
- luxe penthouses
- stately mansions
- small starter-home condos in brand-new buildings
- sixth-floor walk-ups in historic districts
- …. and more!
Many buyers use price per square foot and accompanying factors (such as proximity to the train, or an elevator in the building), as the best way to determine value.
Buyers will need to account for the down payment and also pay closing costs, maintenance fees, taxes, and common charges.
Sellers pay for the buyer’s broker, so that part for the buyer is free; a buyer’s broker will also look at the history of a building’s financials to anticipate any additional costs, like assessments to cover building expenses or improvements.
A broker who is not on your side may not offer the most complete information, or could push you toward an offer on a property that’s not the best purchase for you. Keep this in mind especially with new developments, where brokers may be incentivized to sell units before they are completed or even initiate false bidding wars to raise their commissions.
Do note, however, bidding wars can be legit and necessary to have an offer accepted, even for lower-priced properties. “Brooklyn is popular. There are still bidding wars,” Benham says. “Come in with a good asking price; don’t assume you can go in low.”
Housing in Brooklyn: Condo versus co-op versus townhouse
Housing terms alone can feel overwhelming when you’re buying in Brooklyn, where home styles include townhouses, rowhouses, brownstones, co-op buildings, condos, and new developments. Condos and co-ops share many similarities, but can offer completely different living and ownership experiences.
Purchasing a Brooklyn condo
“When you purchase a condo, you’re purchasing real property,” Benham says. “It’s a simplified way to think of freedom.”
The condo price per square foot may be a little more expensive, but you’re purchasing the freedom to do whatever you want, like lease or renovate the unit without co-op approval. Other expenses may include a monthly common charge and property tax.
Taxes, however, can have abatements, which decrease the tax charge significantly. Always ask how long the abatement will run, and if it will be renewed, to prevent unexpected increases.
New condo construction can also offer good deals on brand-new units with perks like in-building gym access or a communal roof deck, but don’t let the lure of fun features sway you.
“New developments can have all sorts of things to look out for, like delays,” Benham says, noting a December move-in date can really mean the following March or June. “Have your attorney look through the offering plan and know that as an owner you can redefine that offering plan once the sponsor turns it over.”
Potential buyers can negotiate a flexible closing date, or perhaps a few additional perks, like not paying the amenities fees for the first year or asking for closing costs to be covered by the sponsor.
Purchasing a Brooklyn co-op
Similar to a condo is the elusive co-op (short for cooperative), which refers to a building in which residents own the entire structure, rather than merely their individual unit. “A co-op purchase is in shares, and typically less expensive than a condo,” Benham says. The closing costs buyers pay may add to the building reserves, and the property tax is built into your monthly costs.
The largest challenge of buying a coop is the board approval process, which can involve showing all of your personal financial information and preparing a board package to ensure, “their corporation stays strong,” Benham says. “Co-ops are the most complicated. They build a tight community and that’s what home is all about, so they want to know their neighbors.”
For prospective co-op members, the advantages need to outweigh some of the challenges.
Purchasing a Brooklyn townhome or multi-family home
For townhomes and multi-family homes, which are generally significantly pricier than condos and co-ops in shared Brooklyn buildings that can range from just a few units to hundreds of units, properties are generally much older, and a good inspector is essential to the purchasing process, Benham says.
Townhomes and multifamilies can be ideal for people who want to renovate, or even manage a rental unit attached to their home, but Benham notes that, especially in New York City, renovation will always be more expensive and more time-consuming than you think. You’ll need significant financial flexibility for this to be a good choice.
Many Brooklyn homes are built with brick; you’ll also find vinyl-sided, brown sandstone, limestone, and some older homes with wooden frames, and new developments with metal framing and drywall interspersed throughout the borough, Benham says.
Get the lay of the land in Brooklyn
Brooklyn is composed of 66 distinct neighborhoods, most of which are accessible by a range of local and express subway lines, buses and/or the East River Ferry. Generally, the further the neighborhood is from Manhattan, the lower home prices will be.
For example, Greenpoint and Williamsburg overlook the East River skyline and will generally have homes that are higher in price than Prospect Lefferts Gardens or Coney Island, which are several miles further from Manhattan.
Buying in one of Brooklyn’s “emerging neighborhoods,” as Benham says, is another way to guarantee money goes further. Trendiness shifts quickly in New York, but Benham says Prospect Lefferts Garden, as of fall 2019, is a great place to house-hunt — it’s right near Prospect Park, with Park Slope, which has been an established neighborhood for decades, on the other side.
Prospect Lefferts Garden residents can enjoy many of the same perks and lifestyle as Park Slope residents, without the steep prices (yet). An express train reaching a further out Brooklyn neighborhood, like Crown Heights, is another indicator of a potential great return on what may be a lower price per square foot currently.
Common problems with Brooklyn homes
The best way to foresee any problems with a Brooklyn home you’re interested in is to hire a professional. “I highly recommend that my buyers hire a reputable inspector to do a full report on the potential purchase property. This is the best solution to discovering any major red flags in any specific property,” Benham says.
Frozen pipes, power issues, flooding and mold, old plumbing, fireplace upkeep, and roof repairs are common issues.
Hyper-specific to Brooklyn, however, are also façade upkeep, rodents or bug infestations, replacing older windows for better insulation (or noise control), and upgrading air conditioning systems in older homes.
Benham recommends knowing the guidelines for purchasing in landmarked areas, which can limit potential renovations.
Tips for Brooklyn homebuyers: When to buy and how to find a great deal
Expect to spend an average of one month to three months, if you’re pre-approved, to buy in Brooklyn. Of course, this can change on a very personal basis. Some people may love the first property they see, others may be more particular and feel a need to continue looking for several seasons.
“Spring is the hottest season; the most properties hit the market then,” says Benham. “Fall is second.”
Meaning, winter or summer can be better times to buy, though there is less inventory, fewer people are going to find homes, and the offer process can be less competitive.
In any season, buyers can also get creative to make their offers stand out, and a buyer’s agent, like Benham, will do as much as possible to make the offer look as appealing as possible.
Purchasing in New York City is generally considered a safe investment, and while neighborhoods can change in popularity, a few elements will nearly guarantee the value of your home.
Benham cites proximity to public transportation as important, as well as parks and restaurants. Legally, she cannot comment on schools, though that may be of interest to some buyers.
Find a top buyer’s agent in Brooklyn
Finding a top buyer’s agent in Brooklyn can be essential to your purchasing process. A top buyer’s agent in Brooklyn helps their clients buy 1.6 times more homes than the average Brooklyn agent and saves their buyers an average of $145,484 on their home purchase — that’s money you can spend on takeout!
“It’s a partnership, it’s a process, and it can be a journey to the closing table,” Benham says. You want to feel like your personalities click and you can trust your agent.
Once the offer is accepted, you can officially call yourself a Brooklynite. Welcome home!
Header Image Source: (Banter Snaps/ Unsplash)