When you hear the word Brooklyn, you probably think hipster.
But you should really think staggeringly unaffordable housing.
In Brooklyn, “a resident would need to devote 98 per cent of the median income to afford the payment on a median-priced home of $US615,000,” Bloomberg reports.
That’s higher than between 2005 and 2008, at the height of the housing bubble.
The data comes from RealtyTrac, the real estate information company, who find that San Francisco and Manhattan are the second and third least-affordable.
Brooklyn’s wallet-destroying real estate surge comes thanks to a few factors, but the biggest one is the saturation of Manhattan.
The world’s super-super-rich have started to use Manhattan as the new Swiss Bank Account — since 2008, a reported 30% of condo sales in large Manhattan developments have come from overseas. This is pushing the slightly-less-super-rich to Brooklyn.
And they are ready to buy.
Ninety-eight townhouses in Brooklyn sold for over $US3 million in 2014, most of which were in the swanky neighborhoods of Brooklyn Heights, Cobble Hill, and Park Slope, where a historic brownstone went for a record-breaking $US10.78 million.
Other trickle-down effects are more socially devastating.
“What’s a frustration for middle-class buyers amounts to a desperate crisis for poor renters,” reports Andrew Rice in a New York Mag feature on gentrification in East New York.
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