All Real Estate Inside, Outside of NYC Now Too Expensive
On the real estate front, there's good news, and bad news. The bad news is you can't afford Manhattan. The good news is that Brooklyn is—oh. Hm. Well, the good news is that Queens is—oh. Shit. Uhhh....
Non-millionaires don't even think of buying housing in Manhattan any more. But the insane real estate market in Brooklyn snuck up on everyone a little bit. Just a decade or so ago, just moderately affluent people could still afford apartments in much of Brooklyn, and now, you blink, and there's a report talking about "The Manhattanization of Brooklyn" and throwing around the sort of jargon that somehow does not match the "coolest fucking place on earth" Brooklyn image, somehow...
As investors begin chasing yield, the outer markets are perceived as having a more attractive risk-return profile than in the last cycle. The building stock and demographics have changed in a sustained manner and are expected to remain. At the same time, value increases in Brooklyn have been strong and locally outperforming Manhattan. For example, in Williamsburg, Greenpoint, and Bushwick combined, the average price per SF in 1H14 was up 26% over 2013, compared to 12% in Manhattan. Additionally, average cap rates in the outer markets are 180 bps higher than Manhattan. As such, Brooklyn and other outer markets are attractive targets for yield seeking investors.
You know what I love about Brooklyn? The yield seeking investors. Yeah, Brooklyn is fucked. And Queens? Long Island City is currently being filled with luxury condominiums. It's only a matter of time before Queens is fucked. Open your eyes, home-seeking New Yorkers. It's too rich here. It's not going to happen. You want real estate? It's time to cast your eye to a new city. A brighter city. A city for everyone....
Over the years, Miami has been referred to as the city's sixth borough, and it would appear that in the exclusive world of luxury real estate, this has never been truer. A wave of New York City developers has washed onto the Florida shoreline in recent months, bringing with them New York buyers, and increasingly, New York City-type pricing.
Fuck.
