New York City residents looking to buy in Brooklyn may have a tough time finding deals on townhouses thanks to an influx of foreign investors, according to Brooklyn real estate website Brownstoner.
These investors reportedly come with a lot of cash on hand, and are snapping up buildings across the borough, beating out families who require financing to afford the properties.
The investors often aren’t looking to live in their purchased properties, but eventually rent them out and turn a profit, Brownstoner writes.
Of six real estate agents who Brownstoner talked to, four said they had spoken with investor groups looking to buy houses, including groups from Europe and Israel. They tend to purchase in more affordable neighborhoods like Bed Stuy, Crown Heights and Bushwick, and only occasionally head into Fort Greene or Carroll Gardens.
Investors have much lower expectations when buying homes, purchasing places with stop-work orders or foreclosures that other buyers wouldn’t touch, according to Brownstoner. But the problem for families arises when investors purchase regular single or multi-family homes.
The normal home buyer doesn’t stand a chance against a low, all cash offer from an investor backed by a larger firm.
According to a report by Douglas Elliman real estate, listings of condos, co-ops, and one to three family homes in Brooklyn were down 18.5% in the second quarter, leaving just 4,704 units up for grabs.
As the number of available spaces dropped, so did the number of sales, resulting in higher prices. The report stated home prices in the borough are at a 10-year high, increasing 14.7% year-over-year, with inventory at a seven-year low.
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