Until recently, Brooklyn was a prime beneficiary of the strong economy and the skyrocketing price of Manhattan real estate as the daring (but not really) sought out cheaper prices and more space on the other side of New York City’s East River.
Obviously, that’s over. Who needs to move to Brooklyn when Manhattan’s getting cheap? No one. Which makes the ungodly amount of forthcoming Brooklyn housing inventory even more of a disaster in the making.
According to the New York Post, Brooklyn leads the way in unfinished condo developments:
Williamsburg is ground zero in the growing scourge of stalled construction that has left the neighbourhood littered with 18 vacant lots and rusting steel building frames — more than in all of The Bronx, The Post has learned.
Block after block in the trendy Brooklyn community and a few adjacent streets in Greenpoint have been declared stalled construction sites by the city.
A team of building inspectors found 143 stalled sites around the city. But the cluster of lots in Williamsburg, where development was white-hot just two years ago, is the biggest.
The ironic thing is that even in the good times, this area looks like a hell hole. Drop any midwestern, suburbanite in the middle of Williamsburg, and they’d be gobsmacked to realise that they’d landed in a “desirable” area.
Gawker points out that this is the hipster’s dream, since really, they all want to live in a “ghetto” — you know, they want to be real.
Beyond just the bad economy, it’s no surprise that developers in this area (in particular) are dragging their feet on spending the money to complete these devlopments. The inventory glut in this area is already huge.
The Real Deal: The inventory of new apartments in Williamsburg could double next year, which industry experts say puts more building foreclosures on the horizon.
An estimated 2,818 new apartments will have entered the Williamsburg market by the end of this year, according to data compiled by residential brokerage firm Aptsandlofts.com. Next year, 2,766 apartments are expected to come to market, the company data says.
“It used to be enjoyable, exciting to open a new building. Now it’s nerve wracking,” said David Maundrell, president of Aptsandlofts.com.
He said the biggest hurdle to selling a new project is obtaining mortgages, particularly since Fannie Mae (FNM) started requiring in March that a building be 70 per cent sold before it will guarantee mortgages in a building. Next month Freddie Mac (FRE) is expected to implement the policy, which is intended to reduce the amount of risk the government-controlled finance companies take on.
Damn Fannie and Freddie! Always screwing things up with their “lending standards” and whatnot. Someone call Barney Frank.
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