Five months after the passage of the de Blasio administration’s first neighborhood rezoning, investment in East New York’s housing market has increased.
Both residents and realtors have taken an interest in selling homes in the neighborhood now that the area is “on the map” after extensive debate over it’s rezoning that is slated to bring in mixed income housing and more businesses.
Conrad Higgins, the owner of Higgins Realty Group said that soon after the plan was approved by the city council this April, more potential homeowners and investors have begun to reach out a lot more and home prices have steadily gone up.
“Before the rezoning, there were homes for sale and I would call investors and see if they were interested, and they wouldn’t come to East New York until after the rezoning,” he said. “They’re calling me everyday asking for houses.”
Higgins also said that people who used to have houses on the market for about $300,000 are holding off in hopes of selling their homes for a higher price.
According to home prices on Zillow.com, home prices in East New York have gone up. Between 2013 and 2014 the median sale price of a home went from $260,447 to $ 267,974, a 2.9 percent increase. But from 2014 to 2016, the median sale price went up to $286,936, a 7.1 percent increase.
During January of 2016 the median sale price of a home was $338,500 and by April 2016, the median sale price was $370,000. And in May of 2016, the median sale price had jumped to $450,000.
Maya Landesberg, a realtor with Massada Home Sales confirmed that the increase in interest has coincided with a jump in prices.
“It also depends on how big it is and if there’s parking,” she said. “What people can get for their money square footage wise is so much more in East New York.”
Landesberg also said that many buyers want tenants to offset the cost of their mortgage. One of Massada Home Sales recent sales included a two family, three bedroom, 2 car garage home for a little under $600,000.
Chris Banks, the director of East New York United Concerned Citizens said that he has been told by residents that since this spring, he’s seen more business cards left on people’s doors and has heard of phone calls being made to residents.
“People are getting direct mailings now, and you see it here in bold letters ‘we buy ALL CASH’,” he said.
Maryanne Haimovitch, an investor with Elite Properties, had been looking into flipping hopes in East New York for the last two years and said that news of the rezoning is good for business but only for now.
“It’s creating a buzz in the neighborhood, which is good for now, but it’s more for developers,” she said.
Haimovitch also said that she thinks the raise in interest is mainly due to East New York being one of the few neighborhoods left in Brooklyn where families can buy homes for under a million dollars. But some homes are now being completely renovated before being sold, so she also thinks that more luxury will come to the area soon, which will in turn raise prices again.
Rachel Meltzer, a professor for the New School said that the rezoning and change in home prices could lead to even more developers to become interested in the area.
She predicts that even more speculators will become interested in the neighborhood and that changes will spread from inside the rezoning district to the surrounding area.
“It could also change the overall demographic and economic composition of the neighborhood, which could have implications for the local neighborhood culture,” Meltzer said in an email.
She also predicts that the rate of change caused by the prospective development and investment depends on how many current residents can afford the new units in the rezoning area, and who can afford rent outside of it.
Though Banks is wary of how the speculators and newfound interest in housing, he isn’t against rezoning and the investment in the area.
Apart from higher home prices and rent prices, the plan will bring a much- needed community center and a fund set aside by the city to help longtime homeowners to help them legally convert their basements in hopes of renting it to potential residents, and for upkeep.
“We just want to be sure that it doesn’t negatively affect already existing residents,” he said.