© The Financial Times Ltd 2016
FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
October 4, 2013 6:56 pm
Williamsburg, a neighbourhood in the New York City borough of Brooklyn, is booming in more ways than one. Over the past decade the district has seen an influx of hipsters and young professionals thanks, in part, to the area’s blossoming art and music scenes. While some parts still feel the effects of its industrial past, Williamsburg has also been transformed into one of the city’s most sought-after areas for high-end real estate.
Today the artsy enclave is awash in newly erected town houses and sprawling glass and steel waterfront high-rises stocked with hundreds of spacious homes. To the dismay of many long-time residents, the new developments are attracting investors once exclusive to Manhattan’s well-heeled property circles. Take David Karp, founder of microblogging platform Tumblr, who recently left his Greenwich Village home and paid $1.6m for a one-bedroom loft apartment in south Williamsburg.
Foreign buyers are also helping to fuel property sales. Thomas Bohan, an estate agent with Custom Brokers, estimates that foreign buyers accounted for a third of all home sales in Williamsburg over the past three years.
“Williamsburg is now an established part of New York’s luxury property market,” says Christine Blackburn, an estate agent at the Corcoran Group’s Williamsburg office. “International buyers, as well as long-time New York investors, no longer see Manhattan as the only place to purchase upscale property.”
The deluge of new construction has pushed Williamsburg’s ratio of new condos to existing housing to one of the highest in New York City. More than 130 buildings were completed or planned for the area in the past two years, according to the New York City Department of Buildings. The same records also show 2,818 new apartment units will hit the market in Williamsburg by the end of this year; another 2,766 are projected by the end of 2014. These figures dwarf other parts of Brooklyn and outpace established Manhattan neighbourhoods such as the Upper West Side and Tribeca.
The rush of high-end investors is also pushing Brooklyn’s overall property market higher. Douglas Elliman’s second quarter market survey shows average and median Brooklyn sales prices up by 14.7 per cent and 12.3 per cent respectively, compared with the year before. Over a three-year period, average and median sales prices in Brooklyn have risen 23.3 per cent and 18 per cent respectively.
The average sales price for a home in Brooklyn now stands at a record $671,011; the median price is $550,000. In Brooklyn’s upmarket sector, average and median sales prices rose 15.1 per cent and 20.4 per cent respectively, compared with the year before. The average price for a high-end home (the top 10 per cent of all sales) in Brooklyn now stands at $1.9m.
While those figures fall short of Manhattan prices, experts say home prices in Brooklyn are rising faster than in Manhattan and the pace of sales is at a record high. The average sales price for a Manhattan home is $1.424m; the median price is $865,000, according to Douglas Elliman.
Much of the new construction has taken place alongside the East River waterfront, a low-lying area of Williamsburg that, for decades, was dotted with decaying or long abandoned factories and warehouses. Developers have now erected a forest of glass-covered 20-30 storey condominium towers along Kent Avenue, one of the area’s main thoroughfares.
Northside Piers consists of a pair of high-rise condominium towers along the river, with a third tower under construction. The first two towers were designed by FXFOWLE, the architectural and interior design firm with residential and commercial projects around the globe. Apartments at the complex start at $385,000 and rise to $2.9m.
A two-bedroom, three-bathroom apartment in Two Northside Piers, the second tower of the complex, is being marketed by Douglas Elliman for $1.6m. The five-room apartment has dark walnut wood floors and an open loft-like living and dining space. Floor-to-ceiling windows have expansive views of the Manhattan skyline.
Smaller town houses with more modern aesthetics are clustered around the side streets that funnel into Bedford Avenue and Lorimer Street – two popular streets teeming with trendy bars, cafés and restaurants.
A three-bedroom penthouse in an eight-unit condo building on Withers Street in Williamsburg is being marketed by estate agency apartmentsandlofts.com. The full-floor apartment is listed for sale for $1.6m and measures 1,500 sq ft with two bathrooms, a chef’s kitchen and direct lift access. The home includes three outdoor decks that span 1,000 sq ft with views of Manhattan. The building, measuring 12,500 sq ft, was designed by Michael Muroff, a New York-based architect.
Williamsburg’s transformation from squat industrial buildings and row houses, two decades ago, to affluent enclave is a familiar story in New York City real estate history. Driven from upscale Manhattan neighbourhoods, such as Soho and Tribeca, by soaring rents in the late 1980s, young professionals began migrating across the East River where Williamsburg offered less expensive living spaces.
For decades, construction in much of Williamsburg was designated by the city for commercial structures only. But in 2005, with many of the factories long-shuttered or abandoned, city officials redesignated – or rezoned – many areas of the district to allow for residential construction. That sparked a flood of new property development as private money poured in. In 2005 alone there were 130 new developments in the works, according to the New York City Department of Buildings. Over the next five years more than 1,000 building proposals were filed with the city.
China-based Xinyuan Real Estate plans to build 200 condos near the waterfront, while a few miles to the south, the Carlyle Group aims to build a hotel and a residence with more than 200 apartments. Now, as real estate prices continue to rise, property experts are predicting that Williamsburg will follow the trajectory of Soho or Greenwich Village. “It’s a natural New York progression,” says Ralph Modica, an agent for Douglas Elliman. “Real estate values are now influencing the neighbourhood and wealthy buyers are showing up.”
● Development has pushed Williamsburg’s population to about 125,000 – up 10,245 since 2000
● A two-bedroom apartment in Williamsburg can cost between $3,500 and $3,750 on average per month in rent
● Crime rates have plummeted
What you can buy for . . .
$1m A one-bedroom apartment in a renovated condominium building near the East River waterfront
$2m A two or three-bedroom apartment measuring 1,500 sq ft in a condominium
$5m A renovated four-storey town house with five bedrooms, two bathrooms and a large garden
This article has been subject to a correction
Copyright The Financial Times Limited 2016. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.