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Why You Can't Buy in Brooklyn: Social Media, Tech Workers Grabbing Homes

By Amy Zimmer | July 10, 2014 7:51am | Updated on July 11, 2014 4:27pm
 Brooklyn prices hit record hights in the second quarter of 2014, according to real estate reports.
Brooklyn Real Estate
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BROOKLYN — A growing number of employees in the social media, digital media and information technology industries are buying homes in Brooklyn, helping lift prices to record highs in the borough, according to data compiled by a Brooklyn real estate firm.

The number of Brooklyn buyers who said they work as social or digital media specialists spiked 571 percent over the past year, according to a quarterly report by Ideal Properties Group, which took the firm's data from buyer registration forms and offers to purchase. The total number of these buyers, however, represented a fairly small sample size of 12.

Buyers who work in IT or engineering also jumped significantly, from 10 last year to 20 this year.

"We've heard that these industries were growing, so we were bound to see that somehow trickle through these numbers," said Aleksandra Scepanovic, managing director of Ideal. "I think [buyers from] the tech sector will continue to grow in the sense that these professions are growing."

Scepanovic said he's heard anecdotally that many of these tech workers not only work in tech, they work specifically in creative companies based in Brooklyn — which has listed among its recent tech expansions the DIY-clearinghouse Etsy, 3-D printing company MakerBot and Kickstarter.

"The city has managed to turn the borough into a very attractive tech option," she said.

Buyers working in IT represented 17 percent of the total buyer pool, while social and digital media workers represented 10 percent of the buyers, the report shows. Those working in finance, accounting and sales still ranked No. 1 in terms of buyers, at 21 percent, though their numbers dipped by 4 percent from last year, according to Ideal.

"There are quite a few people who can't afford Brooklyn's prices wondering who is walking around with wads of cash," Scepanovic added.

Prices of Brooklyn homes reached record highs in the second quarter, according to a report released Thursday by Douglas Elliman.

The average sales price jumped nearly 17 percent over the past year to $783,296, and the median — or the midpoint of the market — rose 4.5 percent to $575,000, the report found.  The luxury median sales price also hit a record at $2.14 million, up nearly 30 percent from the year before.

Brooklyn is the only borough where the median price hit a higher mark than its 2007 pre-Lehman Brothers high, noted real estate expert Jonathan Miller, who authored the Elliman report.

The driving factor in the luxury market's dramatic price jumps were the large sizes of upscale properties, Miller explained.

"People are looking for bigger space, whether they are priced out of Manhattan or just want to be in Brooklyn," Miller said.

Douglas Elliman's Yuval Greenblatt said that developers have picked up on the demand for square footage in the layouts of their new buildings, like the Toll Brothers waterfront project in Dumbo called Pierhouse.

"That shows developers are willing to take that risk now [to create bigger apartments]," he said.

With average condo prices breaking the $1 million mark in the borough's most desirable neighborhoods — $1.04 million in North Brooklyn (up nearly 27 percent over the past year) and $1.23 million in Northwest Brooklyn (up 23 percent) — sellers will likely be emboldened to continue pushing the envelope, he said, especially as inventory remains limited.

"You'll continue to see prices driven higher," he added, saying new developments aren't likely to put a dent in the low inventory.