- The Bronx, once written off by buyers and renters alike, is becoming the next front in New York City's gentrification wars
- The formerly blighted South Bronx has developed a moniker among real estate professionals as "SoBro" -- suggestive of one of Manhattan's ritziest neighborhoods
- The dizzying pace of change is leaving some residents fearful for the future, as one lifelong resident told CNBC.
For lifelong Bronx resident Leette Eaton-White, the first sign of her neighborhood's transformation came by way of her local supermarket.
It was there on a shelf that the 31-year old college administrator noticed Method, an organic (and relatively pricey) line of cleaning products. "I had only seen them in Manhattan or Westchester previously," White, who lives in the Northern Bronx's Edenwald section, told CNBC recently in an email.
"I instantly thought, 'Oh no, this is the beginning of the end,'" White said. She added that "prices for everything [in the area] have gone up. Even though income hasn't changed much, the cost living gets higher all the time."
The "end" to which White referred could in fact be affordable living in New York City's latest up-and-coming neighborhood.
The Bronx — both famous for being the birthplace of hip-hop music and notorious for its intractably hardscrabble conditions in the 1980s — is in the midst of a revival that's both sparking effusive praise among real estate professionals and stirring dread among working class residents like White, who face the prospect of steepening living costs in one of the city's last bastions of affordable housing.
Until recently, the Bronx was an unlikely candidate for the wave of gentrification that's swept across the city and sent housing prices on a tear. It wasn't that long ago that the South Bronx was all but written off by buyers, renters and owners alike.
Associated with urban blight since at least the 1970s, the area was deeply entrenched in a socioeconomic spiral that it has gradually shed. Now, the Bronx has become the latest avatar of New York City's dizzying pace of revitalization in formerly working-class areas.
Fast forward several decades, and the rough-and-tumble image of the borough — immortalized on screen by cult movies like "The Warriors" and "Escape from the Bronx" — is being redefined by the construction of both affordable and luxury housing alike. Zillow said earlier this year that several Bronx neighborhoods saw double-digit price increases in 2017, even as average prices across the city dipped.
New residences are attracting people who have been priced out of Manhattan and Brooklyn, experts say. Formerly rough neighborhoods like Morrisania, Mott Haven and Port Morris have all seen a jump in housing prices, according to Ralph DiBugnara, senior vice president of Residential Home Funding Corp.
In fact, DiBugnara told CNBC there has been so much revitalization that the South Bronx has even earned a nickname in real estate circles — "SoBro," a title that echoes Manhattan's upscale redoubt of SoHo.
Much of the effect is attributable to surging prices across the New York region. City residents fleeing high prices "are continuing to move further out as pricing continues to grow," Andrew Barrocas, CEO of brokerage firm MNS.
"People are willing to go, especially if there's transportation," he said, adding that the search for affordable living "keeps moving as the core [of New York City] gets more and more expensive."
Joan Kagan, a sales manager of the Triplemint real estate firm, said that low cost and a short subway commute into Manhattan outweigh other considerations.
"While the South Bronx and other neighborhoods in the Bronx do not have the cachet or the shopping or dining opportunities that we find in Manhattan or Brooklyn, it does have proximity to midtown Manhattan via subways, increasing job opportunities with hospitals and upcoming commercial and office space development," she said.
Mable Ivory, a real estate advisor for Engel & Volkers, said that the South Bronx offers what may be the last affordable home ownership opportunity in New York City, and one doesn't necessarily have to work in Manhattan to enjoy the benefits.
The neighborhood offers easy access to the Metro area's major cultural and business hubs, Ivory said, as well as relatively cheap housing.
"In the Grand Concourse area, characterized by beautiful pre-war buildings with huge, original floor plans, we're seeing a baseline for studios around $1,500 to rent and $150,000 to buy," she said. There are also options for those looking for luxury.
Penthouses aren't exactly synonymous with living in the Bronx—yet Ivory said she has one available for $3500 per month that features "a wraparound terrace with unobstructed views of Yankee Stadium, Manhattan, and New Jersey," she said. "You're just not going to find that level of property at that price point anywhere else in New York City."
Alex Villacorta, executive vice president and chief economist at HouseCanary, said the South Bronx is ripe for those looking for condos or single-family homes — both of which have valuations well below the city's average.
Gerard Marrone, CEO and co-founder of real estate startup Praetorian Group, said that the South Bronx represents a ripe investment opportunity for those who are getting in early enough.
"To me, the South Bronx is one of the last frontiers in New York," he said. "As the city's population grows and people search for convenient and affordable housing, buyers in the South Bronx will see their investments grow substantially."
Jeff Holzmann, managing director of real estate investment firm iintoo.com, said that those looking for an investment opportunity should investigate the neighborhood while it's still in the early stages of a boom. He also cautioned against irrational exuberance.
"The reality is that from an investment perspective, time is money, and while a gutsy developer can buy low today and build quickly, they still have to pay the financing cost and the annual taxes as they wait and hope that the market will turn," he said.
While the area still has more growing to do before it joins the ranks of New York City's most desirable neighborhoods, Holzmann said that it's well on its way — even if the signs totally apparent just yet.
"The trend is clear to see," he said. "It is a classic case of 'if you built it, they will come.'"
However, that idea is cold comfort to people like White, who resides in public housing with her mother, and said she's likely to see higher rent in the near future. Calling home prices in her area "insane," White pronounced herself unimpressed with the changes sweeping through the Bronx.
"I'm not thrilled that the improvements will ultimately be reaped by transplants instead of people who have lived here their whole lives, myself included," White told CNBC. "Ownership, especially in New York is a distant dream."
She added: "It's great when a neighborhood improves for and by the people who live there," stating wistfully that the Bronx's revitalization "pushes the old out, erases their history, and pretends they never existed."