Brooklyn may be best known as the hipster mecca of New York City, but this southern borough has much more to offer than may be immediately apparent. Kings County (Brooklyn’s official county name) has become an attractive area for people of all ages and walks of life to live due to its vibrant local culture and affordability compared to the rest of NYC.
Of course, being close to Manhattan is another major plus that’s been attracting new residents from far and wide. Situated directly south of Manhattan, Brooklyn is home to a very diverse community. Be it the Polish community in Greenpoint, or the Hasidic congregations of Flatbush, Brooklyn is a cornucopia of cultural diversity just waiting to be explored.
To further add to the cultural richness of this vivacious New York borough, residents of Brooklyn enjoy the presence of the Brooklyn Academy of Music, the Brooklyn Botanic Garden, and Coney Island. Brooklynites have a large array of cultural and educational activities at their disposal, meaning it’s rare to find a boring moment in the borough.
If you’re considering making a move, you’re likely wondering whether to rent vs buy in Brooklyn. While it may come as a bit of a disappointment, there is no simple answer as this question. You’ll have to evaluate your own personal and financial situation to come to the right conclusion. That said, there are some things that can definitely influence your decision, so let’s take a look at those.
Real Estate in Brooklyn
While Brooklyn may be cheaper than Manhattan, it is definitely not cheap: the median home value in this borough is a whopping $786,400. The median rent is $2,495 a month, which is also on the higher side of things as far as the national average goes ($1,430).
That said, there is a fair amount of price diversity even within the borough itself: Park Slope, for example, has a median home value of $1,268,300, while Brownsville’s median is a comparatively cheap $456,000. While Park Slope is completely unaffordable to most, it is slightly more affordable for renters, with a median rent price of $3,225 each month. Hardly a bargain, but definitely more feasible for many than buying a property in the area.
As a whole, Brooklyn’s housing market has been cooling off, meaning buyers are in control. While certain neighborhoods like Brownsville have been seeing value appreciation over the past year, quite a few areas are experiencing depreciating home values. Park Slope, for example, has seen a painful 7.0% decrease in home values over the past year. Values are expected to continue falling another 1.2% in the coming year.
Should You Rent or Buy in Brooklyn?
So, what does this mean as far as buying vs renting in Brooklyn? While some may think this is a good opportunity to get into a highly sought after market while prices are lower, it’s a good idea to pay attention to the old investor’s adage: don’t try to catch a falling knife. While you may be able to snag a property for a bargain in the current market, it’s best to wait until things have settled a bit more, lest you get stuck with a property that continues losing value.
However, there are some markets that are expected to increase in value, so buying there may be a good idea. Neighborhoods with properties that are expected to appreciate in value include Georgetown, Borough Park, and Brownsville.
On the whole given the current market conditions, renting seems to be a better bet than buying in most areas in Brooklyn, although there are exceptions.
Advantages of Renting
In general, renting is a good choice if you want the freedom to move around. Renting is a much smaller commitment compared to buying a property: there’s no mortgage, you don’t have to pay as many upfront costs, and you can pretty much get up and leave after your rental agreement has ended (and sometimes even before that).
If you buy a property, you’ll need to be prepared to live there for quite a long time. Once you’re ready to leave, you’ll have to go through the long and arduous process of putting the home on the market.
That’s not to mention that, quite frankly, now appears to be a bad time to buy in Brooklyn due to the rather poor market outlook. If you want to experience the Brooklyn lifestyle without the risk of making a bad investment, renting may be the way to go.
Advantages of Buying
While the current market climate in Brooklyn does seem to be less than ideal, there is a good argument to be made that having an investment is better than having no investment. In general, housing markets do dip when real estate becomes overvalued, but they continue on upwards after the pricing correction is finished. The current situation in Brooklyn, isn’t looking good, but the area has so much to offer that it will almost surely regain strength in the long term.
When renting, it’s important to be aware that you are not building equity in the same way that you do with a property you are mortgaging. If you buy a home in Brooklyn, you can eventually use it as a financial asset to secure home equity loans and HELOCs, which can be desirable in certain situations.
All in all, there is no clear cut answer as to whether you should buy or rent in Brooklyn. That said, if you are in love with the area and plan to stay a while, then buying is almost always the way to go, regardless of the current market outlook — better to have a stake in something that will eventually turn up again, than no stake at all.
If you’re interested in buying property in Brooklyn, working with an experienced real estate agent can be invaluable. They’ll be able to walk you through the process from A to Z and even secure a better closing price in many cases. What’s more: Clever Partner Agents have agreed to a $1,000 home buyer rebate on eligible homes.
If you’d like to get in touch with one of our Partner Agents for a no-obligation consultation, simply fill out our form and we’ll be in touch shortly.