Brooklyn hot? Not so fast.

Migration to the borough has largely peaked, study finds—just don't tell brokers

The creation myth of the sizzling Brooklyn real estate market goes something like this: First came Brooklyn Heights. Then came Manhattanites.

Then Park Slope and Cobble Hill and Carroll Gardens and Williamsburg, and, now, there are neighborhoods east of Prospect Park with brownstones for $1 million and more.

While the causes of the housing boom are varied, the eastward migration of people moving from Manhattan to Brooklyn has been palpable in recent years, transforming property values from the shores of the East River inland.

The great migration, however, may be over. While brokers say the wave of buyers continues to sweep the borough, a review of federal migration data shows that the number of people moving to the borough from Manhattan peaked between 2001 and 2002 after a steady climb beginning in 1996, the first year for which data is available. Since migration patterns hit a high of 13,261 in 2002, the number of people moving from Manhattan to Brooklyn has steadily dropped.

A review by The Real Deal of Internal Revenue Service data on taxpayers who move from one address to another between annual tax filings shows a similar pattern of migration to Brooklyn from other boroughs. While the numbers are small in relation to the overall population of each borough, there appear to be clear patterns demonstrating a shift. With the exception of people moving from Staten Island to Brooklyn, which peaked in 2004, the last date for which data is available, migration from all other boroughs has begun to decrease after steadily increasing since 1996 (see chart).

For people moving from Queens, traditionally the borough with the highest number of people to cross over the border it shares with Brooklyn, the year with the most Brooklyn-bound migrants was 2002 when 15,356 people made the move. After a steady rise in migration levels since 1996, the rate dropped to 15,021 in 2003. By 2004, it was 14,780, a 3.8 percent decrease over 2002 migration levels.

In the Bronx, migration to Brooklyn peaked in 2003. In 2004, the rate dropped 7.8 percent.

Brokers, though, say the housing boom is still in effect.

“We continue to see people coming in and saying they want to be in Brooklyn,” says Camille Logan, an associate broker with Fillmore Real Estate. “Some people don’t even try to go into Manhattan. It’s not like we’ve become the second choice, we’ve become the first choice.”

While the numbers indeed reveal migration changes, the significance of those numbers is not necessarily clear, demographic expert and a planner with the city’s Department of City Planning, Joseph Salvo, says.

Analyzing the data is complicated by several factors. First, the data measures only taxpayers who reside in the borough. Some people who use an accountant list their residence as their accountant’s office, thus skewing the data. And of course, not everyone who moves — illegal residents, students who are dependents — pays taxes.

“Tax returns are administrative records, you can’t measure those who are not filing,” Salvo says.

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Still, comparing the change over several years can at least offer different snapshots of migration patterns around the city, Salvo says. Though the census is considered to be the most comprehensive and therefore most accurate reflection of reality, the most recent migration patterns were collected back in 2000.

Since then, some migration patterns have changed, like the flow of people from Manhattan to Brooklyn, while others have stayed the same.

The data also shows the number of people who moved within Brooklyn during the course of the year grew every year since 1996 through 2004. While the data does not say whether those who move rent or own, brokers believe that many move in order to buy.

Logan attributes this to the willingness of people familiar with the borough to live in neighborhoods that were once seen as undesirable. She mentioned neighborhoods east of Prospect Park including Crown Heights. Once feared as crime- and drug-ridden, its finer points — access to Prospect Park, close proximity to the Brooklyn Museum, and the public library — are being appreciated by people who were once outsiders but who have lived in the borough for a while.

“People who may have originally come into Brooklyn looking for a Park Slope townhouse are willing to look in Crown Heights,” she says. “People are more willing to spread out more.”

And of course, the city, which is expected to be home to nearly 9.4 million people in the next 20 years, according to estimates, up from around 8.2 million currently, has attracted people from around the country. Most come from the counties surrounding the city, led by Nassau and Suffolk counties on Long Island; Hudson County, NJ, home of Jersey City; Westchester County directly north of the Bronx; and Essex County in New Jersey, to name the top five counties, respectively, outside the five boroughs from where new Brooklynites have come from since 1996.

Brooklyn is also home to thousands of people from other American cities. In 2001, Los Angeles led the migration to Brooklyn, when 583 people moved across the country into the borough, according to tax records, the largest number of migrants to come to Brooklyn from another American city in any one year. That same year, 513 people moved from Miami to Brooklyn, followed by 418 people from Chicago in 2003; 375 people from Boston in 2002; 371 people from San Francisco in 2003; and 365 people from Philadelphia in 2003.

In the last couple of years, though, the dominant pattern shows people leaving Brooklyn, usually for Queens, rather than coming into the borough. For many, Brooklyn is the first stop on the way to the suburbs of Long Island, just as people from the Bronx move to Westchester, the data shows.

“The traditional pattern is to go from Brooklyn to Queens and then, ultimately, out to Long Island,” Salvo says. “Also, two-thirds of migrants to Staten Island come from Brooklyn.”

The number of people leaving Brooklyn for Staten Island far outpaces those heading from Staten Island to Brooklyn. At its peak in 2004, 2,408 people left Staten Island for Brooklyn, compared to a high in 2003 of 9,399 people who went in the reverse direction, leaving Brooklyn to go to Staten Island.

Likewise conforming to a historical pattern, the number of people who leave Brooklyn to go to Queens has steadily increased since 1996. In 2004, 20,953 people left Brooklyn for Queens, compared to 14,780 who made the reverse commute into Brooklyn, perhaps lending credence to the idea that Queens may be the next hot borough.

Still, more people from Manhattan are moving to Brooklyn than are leaving Brooklyn for Manhattan, and that is good news for brokers like Logan. At that rate, Crown Heights may indeed be the next Park Slope.

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