New York is a city of distinct neighborhoods, almost all of which reinvigorate and reinvent themselves over time. Yesterday’s industrial park or underdeveloped wasteland is tomorrow’s gold coast. Just look at the emergence of SoHo in the 1980s, the Lower East Side in the 1990s and Williamsburg in the 2000s. According to Property Shark, housing prices in Williamsburg have increased by 174% since 2004, with average home prices going from $269 per square foot to $736. By way of comparison, the average US home price actually decreased by 7.6% since 2004. One building at 529 Broadway in SoHo which was purchased for less than a million dollars in 1980 just sold for $150 million.
Of course, it isn’t easy to figure out the right time to buy into a neighborhood—that perfect moment when it’s on the verge, right before the prices skyrocket and the New York Times starts doing saturation coverage in the Sunday Styles. Purchasing at that vanguard is hugely advantageous, as the property’s value will go up relatively quickly, and you get to experience the excitement of living in a neighborhood while it ripens to maturity.
You’re also likely to pay less at the bodega for your beer and have the advantage of eating at all the cool but currently out-of-the-way places before they hit the city’s collective consciousness.
At any given time, several neighborhoods around the city are in this verge stage. Here are five to watch out for now.
An emerging neighborhood in southwest Brooklyn, Red Hook has experienced more ups and downs in the last ten years than many areas face in decades. Separated from the rest of Brooklyn by the Brooklyn Queens Expressway, Red Hook’s uniquely isolated position has allowed it to develop more neighborhood character than most. Red Hook was briefly hot in the early 00s, before cooling down, making it seem as if its growth was just a false start. Development has reignited, however, with a spate of bars and restaurants that have moved into the area like Red Hook Lobster Pound and Fort Defiance, as well as large retail mainstays Fairway and Ikea. Then came Hurricane Sandy, which hit Red Hook particularly hard but showed off, more than its destructive power, the impressive ability of the locals to rebuild. Temporarily, Sandy depressed housing prices dropped 20 percent immediately in the wake of the storm, according to Miller Samuel Appraisers. But this only suggests that now might be an ideal time for investment, as the slight increase in housing inventory after Sandy is almost certain to be fleeting. “People have forgotten about Sandy in Red Hook,” says Executive Vice President Doug Bowen of real estate agency CORE, “The allure of that particular waterfront community is quite strong right now.” Get in before the waterfront is completely transformed by oft-rumored luxury condo developments.
A tiny neighborhood near the Brooklyn waterfront tucked away north of Fort Greene and Clinton Hill, Wallabout has traditionally been industrial in make up. The area has faced a series of obstacles that have held it back from greater development, including the Brooklyn Navy Yard blocking off waterfront access, the position of the Brooklyn Queens Expressway, and lack of convenient subway access, but it’s finally starting to come into its own despite the challenges. In 2011, the city landmarked a segment of the neighborhood on Vanderbilt Avenue, which contains some of Brooklyn’s oldest real estate, including many distinctive old wood-frame houses built before the Civil War. The same Brooklyn Navy Yard complex which separates the community from the water has also undergone a recent metamorphosis, becoming the new home of hundreds of businesses and thousands of jobs. Nearby Pratt University has helped bring a creative class to the area, which is only a short walk from Fort Greene Park. As the neighborhood changes rapidly, asking prices are rising just as fast. According to the New York Times, 15 condos sold in the neighborhood in 2011 for an average of $452 per square foot, but a recently converted building on Washington Avenue is now offering condominium units at between $600 and $700 per square foot. Doug Bowen of CORE is such a fan of Wallabout, he chooses to make his home there.
A term created by real-estate agents, ProCro refers to the western section of Crown Heights, right next to Prospect Heights (hence the “pro”). The key to the neighborhood’s ascendency, according to Bowen, is “the emergence of Franklin Avenue as a commercial corridor,” which has filled up with trendy restaurants in the past few years like Gueros Brooklyn and Barboncino. It’s been possible because crime and racial tensions, which had been a major issue in the neighborhood, particularly between Caribbean and Hasidic Jewish groups, have dropped precipitously in the past two decades. After Prospect Heights, which itself recently broke out as a nearby alternative to the expensive real estate of Park Slope, ProCro is the logical next frontier. The neighborhood has great access to public transportation and is also close to Brooklyn’s green gems, Prospect Park and the Brooklyn Botanic Garden. The area contains what Bowen describes as “extraordinary housing stock,” including many brownstone town houses, and its streets are among the most tree-lined in Brooklyn. Specific ProCro prices can be hard to pin down because of the unclear borders of the area, but in its component neighborhoods, Prospect Heights and Crown Heights, median sales prices increased 9% and 10% over the last year alone, according to StreetEasy.com
Brimming with brownstone row houses primarily constructed in the 1890s, Bedford-Stuyvesant settled in as a residential area popular with African-American families throughout much of the 20th century. Now, as gentrification edges east through Brooklyn, Bed-Stuy is putting off plenty of real-estate heat, spurred on by the convenient transportation options and the quality of the existing housing. Just this year, after a twenty year battle, a huge area of the neighborhood consisting of over 800 structures was declared a historic district by the Landmarks Preservation Commission. It was a huge boon for real estate investors in the area and also “an incredible validation of just how good the housing stock is,” according to Bowen, who says this new status is critical to “keeping the character of these neighborhoods in tact for years to come and driving prices big time.” According to Trulia, the median sales price in the neighborhood has increased 9.3% over the past year, and one three-story townhouse in the historic district sold for $1.34 million late last year. The area around the Fulton Street A and C stop is particularly ripe for growth.
Long Island City
Home to extremely desirable waterfront acreage and convenient transportation to Manhattan, the only thing Long Island City has going against it as a neighborhood on the rise is that it doesn’t have the word “Brooklyn” in its address. Long Island City is as close to Manhattan as anywhere off the island itself, just one stop away on the 7 train. A major rezoning in 2001 sparked a development renaissance, resulting in a series of large apartment buildings on the scenic property abutting the East River. While the waterfront has grown tremendously over the past decade, the momentum has continued apace and spawned the slow and steady expansion eastward into the Court Square region, where several major residential buildings are going up right now. The area around the Court Square subway station is already bustling with office workers from One Court Square, the tallest building in New York State outside of Manhattan, and JetBlue, which moved its headquarters to LIC in 2010. A Modern Spaces report shows that housing prices per square foot in Long Island City increased from $700 to $732 last year.