Brooklyn Real Estate and Mortgage Rates

The booming real estate market in Brooklyn is sending a message to those who believethe borough is an affordable alternative to Manhattan in a uniquely New York way: Fuhgettaboutit!  Brooklyn real estate prices have increased exponentially, with the median price of a Brooklyn home reaching $570,110 in the fourth quarter of 2013, up 11.2% and the highest since 2003, according to figures published by real estate firm Douglas Elliman.  Elliman’s report also said that the sharp price increase is attributed to Brooklyn’s skyrocketing popularity as a popular destination along with very limited levels of new and existing inventory coming to market.

Rising Sales & Falling Inventory

Spring 2014 marked the lowest point for listing inventory since this metric was first compiled in 2008. The borough’s unique combination of rising sales and falling inventory means that median sales price not only increased but the average sales price increased 12.2% to $688,334, according to figures from Elliman.

As rates for the benchmark 30-year fixed-rate mortgage continues to remain relatively low, buyers are taking advantage of the low rate environment, especially with the possibility of higher interest rates in the near future. Rates in the Brooklyn area ranged from 4.06% to 4.77% according to figures from Bankrate.com on a loan amount of $600,000. The mortgages surveyed in the Bankrate.com survey carried discount and origination points that averaged out about 90 basis points. Nationally, the 30-year fixed-rate mortgage rate held at 4.5%.  Payments averaged around $2,800.00-$3,000.00 monthly.

Brooklyn as an Investment 

Buyers should keep in mind that Brooklyn is unique for not only buying a home as a place to live, but also as an investment; for example, many of Brooklyn’s iconic brownstones are separated into 2 or 3 family homes, which provide a great investment opportunity with the perks of individual home ownership.  Buyers should also be aware of the unique nature of each neighborhood, which provides its own unique appeal.  Buyers looking to enjoy Manhattan skyline views from condos in Greenpoint, Williamsburg, DUMBO and Red Hook will find tight inventory and high prices, and even tighter inventory in brownstones found in Bedford-Stuyvesant, Cobble Hill, Carroll Gardens and Park Slope. Communities affected by Hurricane Sandy such as Brighton Beach and Coney Island have seen small price increases while on the flip side, the communities of Sea Gate, Gerritsen Beach and Bath Beach have seen sharp decrease in prices attributed to damage from Sandy, and communities such as East New York, Canarsie and Flatbush still face tepid price growth due to crime and lack of establishments that generate foot traffic and economic development.

Needless to say, Brooklyn will continue to be one of the most active real estate sales markets in the country, not only for becoming a prime destination market but also for the limitless possibilities that real estate in the borough provide.  Whether it is an artist looking for a live-work situation in a Williamsburg loft, a homeowner renting out apartments in a three-family home in Sunset Park, or a family looking for a single family home in Bensonhurst, Brooklyn truly lives up to the hype.

*The rates named in this blog were accurate as of February 1st 2014. 

via:http://www.totalmortgage.com/blog/rates/brooklyn-real-estate-and-mortgage-rates/23949