Where Brooklyn At?! How Does the Brooklyn Real Estate Market Compare to Manhattan?

The Weekly Recap

Still seems like no one has any clue where the economy is going as thousands of new jobs were added in April which is the exact opposite thing that should be happening although inflation numbers are better than expected. Another vertical of inflation that is definitely not cooling is the NYC rental market as it's experiencing a two decade surge. Warren Buffet had his annual shareholders meeting in Omaha, NYC's return to office push has started to retreat, America's risk of debt default is increasing and as a former music industry veteran, concert participation has soared 24% since its high in 2019 which is heartwarming as an artist, but is also a great indicator for consumer behavior.

Where Brooklyn At?! How Does the Brooklyn Real Estate Market Compare to Manhattan?

When I talk about NYC, I always include Brooklyn in that sentiment as the Manhattan and Brooklyn markets are closely tied together (as well as Long Island City) where the measure of consumer behaviors are similar versus say Staten Island or the Bronx or the majority of Queens. Brooklyn is an incredibly resilient market and I'm not just saying that because I'm born and raised there. Brooklyn recovered MUCH faster than Manhattan did after Covid and continues to see incredible new development projects pop up everywhere from Park Slope to Downtown Brooklyn, Fort Greene to Greenpoint and Bushwick to Brooklyn Heights.

However, although neighboring boroughs, there are still some differences.

1. Price: Manhattan has historically had higher real estate prices compared to Brooklyn. The demand for properties in Manhattan, especially in prime locations such as Manhattan's TriBeCa and Upper East Side. Brooklyn, on the other hand, generally offers more affordable options.

2. Neighborhoods: Manhattan is known for its iconic neighborhoods such as the West Village, Chelsea, and the Upper West Side, which offer a mix of commercial, residential, and cultural amenities. Brooklyn has its own distinct neighborhoods like Williamsburg, Park Slope, and DUMBO, known for their artistic communities and vibrant atmospheres.

3. Property Types: Manhattan is characterized by a high concentration of luxury condominiums and coop apartments. Many of these properties offer top-notch amenities, including doormen, gyms, and rooftop terraces. Brooklyn, on the other hand, has a more diverse mix of property types, including brownstones, townhouses, and new residential developments with their own luxury amenity packages.

4. Space: Generally speaking, properties in Brooklyn tend to offer more space compared to Manhattan. Manhattan properties, especially in high-demand areas, are often known for their smaller living spaces and limited square footage. In Brooklyn, it's more common to find larger apartments, townhouses, or even single-family homes.

5. Lifestyle and Culture: Both Manhattan and Brooklyn have unique lifestyles and cultural scenes. Manhattan is often associated with the hustle and bustle of city life, with world-class shopping, dining, and entertainment options. Brooklyn, on the other hand, offers a more laid-back and artistic vibe, with numerous galleries, trendy boutiques, and a thriving food scene.

From a quantifiable market perspective, according to Urban Digs, Brooklyn has out performed Manhattan with more contracts signed (+12%), less units coming off the market without getting sold (+43%) and is about even with the total amount of supply (-1.6%) on the market over the last 30 days. The chart below will show how Brooklyn has performed over the last 30 days. 

Market Performance

Here are how some other indexes and asset classes have performed as of this mornings opening bell.

BROOKLYN Market Update

Here is a view of new inventory that has come onto the BROOKLYN market over the past MONTH as well as newly signed contracts that have taken place over the last week. The biggest similarity, like Manhattan, Brooklyn continues to experience a Neutral market.

Mortgage Rate Update

This week's decreases continues a recent sideways trend in mortgage rates, which is a welcome departure from the record increases of last year. While inflation remains elevated, its rate of growth has moderated and is expected to decelerate over the remainder of 2023. This should bode well for the trajectory of mortgage rates over the long-term.

News You Can Use

• NYC Area Rents Surge By Most in Nearly Two Decades Bloomberg

• Breaking Down Buffett's Warning on Earnings Yahoo Finance

• Buffett's Warning on Banking Crisis: "Fear is contagious" Axios

• Inflation Eased in April But Remains Stubbornly High WSJ

• Banks Tighten Credit Terms, See Loan Demand Drop, Fed Survey Shows Reuters

• America is Drunk on Credit Fortune

• Federal Reserve Warns of Credit Crunch Risk After Bank Turmoil Financial Times

• Yellen is Calling CEO's Personally to Warn on US Debt Ceiling Reuters

• Buffett's Berkshire Hathaway Dumps Billions of Dollars in Stocks Financial Times

• US Labor Market Defies Rate Hikes, Posts Strong Jobs Number Reuters

• Chat GPT is Causing a Stock Market Ruckus WSJ

• How to Characterize the American Economy: From Broken to Bizarre CNN Business

• Home Prices Fell in a Third of US Markets in First Quarter WSJ

• Buffett Says Apple is Berkshire's Portfolio Best Performer Reuters

• Buffett Says Banks Need Some Old Fashioned Values Axios

• Why the Federal Reserve is Watching Commercial Real Estate Axios

• Inflation Slows for 10th Straight Month NYT

• Miami's Love Affair with Crypto is Souring WSJ

The Deep Insight

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