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For the past couple of years, the trumpet call has been sounding all across New York City, especially in Brooklyn, aka the trendiest place in America: There aren’t enough homes, and the ones that are on the market are way the heck too pricy.
So it was a surprise to read in The New York Times that there may be an impending oversupply of housing units. There are signs, it said, “of the white-hot Brooklyn rental market” cooling down.
“As a torrent of new inventory washes across the borough, a handful of REITs, analysts and developers are sounding warnings about a possible supply glut that could play out over the next couple of years,” the Times said.
Break out the artisanal Fort Greene pickles: It’s time for the average buyer to celebrate. Right? Well, not so fast. So far we haven’t run out of folks who can afford the current sticker shock–causing prices. “Developers are pegging thousands of rentals to the luxury market, intensifying competition for the same pool of moneyed millennials, hip techies and so-called broken-hip-sters, empty nesters and baby boomers flocking to the urban core,” it said.
Rather than bringing luxury prices back down to Earth, the burden, not all that surprisingly, is falling on the little guy. Entry-level prices for starter homes are increasing, even as luxury prices begin to stabilize. The glut is actually better for the top tier renter than for anyone else.
“The median rental price for Brooklyn studios soared 15.4% in July over the previous year,” it said. “But for luxury units at the top 10% of the market, median monthly rent edged down 3.4% to $5,347.”
When, oh when, might the oversupply trickle down to the lower echelons of the market? Even those who champion affordable housing in the borough don’t see it coming anytime soon—the brand of Brooklyn continues to trump basic economics and stump affordable housing advocates, or just regular middle-class people who want to live in the city.
“Normally, I’d say the market is getting too saturated,” Brooklyn Borough President Eric Adams told the Times. “But the normal equation doesn’t apply. … The big-bang theory says the universe exploded from the center and continues expanding. The same can be said of Brooklyn.”
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