New York’s Next Hot Neighborhoods

Bushwick, Brooklyn, is over. Ridgewood, Queens, had its hipster moment.

Townhouses have been selling for more than $1 million in Crown Heights, Brooklyn, for some time. And investors are beating a path to the South Bronx and Staten Island.

In New York City real estate, the quest for the next hot neighborhood never ends. But spotting an area that is on the rise before it becomes the next big thing is no easy call. The arrival of a farm-to-table restaurant doesn’t guarantee the neighborhood has turned the corner. Nor can buyer interest change a blighted area overnight. “Just because gentrification is happening doesn’t mean crime drops precipitously,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel. “It’s a process.”

But buyers who seek the next “it” neighborhood, rough edges and all, would do well to take their cues from developers. Sure, you could “follow the artists” and hope you land in the next SoHo. But a better bet than a strong whiff of turpentine, developers say, may be a neighborhood with access to public transportation and real estate values that are rising but still lower than in surrounding areas. Attractive existing architecture is also a plus. Imminent rezoning is an inviting prospect. A new supermarket is another.

Of course, while a supermarket or a cold-brew coffee shop may be enticing to some, these can sound alarm bells for others. The consequences of gentrification can be unfortunate for both longtime residents and new arrivals in search of low-cost housing, even though they may welcome more stores and services.

Developers watch for signs of activity in an “understored” area. “If you’re trying to find a deal, it’s not going to be the most robust prime retail corridor,” said David Kramer, a principal of the Hudson Companies, which invested early in places like Manhattan’s meatpacking district and Dumbo in Brooklyn. “You want to look for what we refer to as green shoots,” he said.

“Connecticut Muffin was a good indicator,” he said, referring to the suburban bakery, which opened its first Brooklyn branch in Park Slope more than two decades ago, and has been a harbinger of gentrification over the last several years in places like Windsor Terrace, Clinton Hill and Ditmas Park. Its newest outlet opened in Crown Heights about three years ago.

In general, those who have followed the subway lines east of Manhattan in recent years have done well in terms of real estate. While that trend continues, developers looking to get ahead of the crowd are going farther afield.

“If it’s a neighborhood that you’ve barely heard of, that’s a good sign,” Mr. Kramer half-joked, noting the Hudson Companies is in contract on a development site in Bergen Beach, Brooklyn, a waterfront community near Mill Basin. Among the draws, he said: Fairway Market has leased its second Brooklyn location there.

Read More…http://www.nytimes.com/2016/02/28/realestate/new-yorks-next-hot-neighborhoods.html

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