After months of dramatic headlines (and equally dramatic price hikes) spurring Bed-Stuy's dizzying growth, could it be that things in this corner over brownstone Brooklyn are actually calming down? Yes, but don't hold your breath for any bargains.
With sale prices having spiked so high so fast, the Daily News reports, investors are cooling on the area, skeptical that this pace of growth can continue (and yield lucrative flips). At the same time, rental prices seem to have leveled off a bit (albeit at a pretty high level), meaning that investors might not net the kind of monthly incomes they're hoping for when buying multi-family properties. All of which means less competition for buyers who are hoping to actually live in the homes they purchase.
"A lot of the money on the table has already been picked up," Miller Samuel data guru Jonathan Miller tells us, noting that once the margin for flipping profit narrows, neighborhoods tend to shift back toward owner-occupied buildings, rather than investment. "When you have these periods of frenzied, highly speculative investment, the time frame is narrow [for how long they will last]," adds Miller. "If you flip and sell to someone else who's going to flip, at some point, there won't be any speculators left to sell to." On a purely anecdotal level, as a Bed-Stuy renter hoping not to get priced out within the next few years, I've (rather gleefully) watched over the past several months as slapped-together flips stall on the market in the neighborhood, while no one I know has experienced particularly dramatic rent increases.
Nonetheless, prices in the area are anything but cheap. According to Miller's numbers (see below), the median sales price jumped 44.3 percent between the end of 2013 and the end of 2014, and median rents 24.8 percent in the same period:
"People hear terms like prices 'cooling off' or 'easing' and think that implies that they're falling, which isn't true," Miller explains. "If there is a slow down, it's very new or is happening right now." So what's next? "We'll have to wait and see what happens in the spring. I suspect it's more of a high plateau," he says.
Still, the cold months always lead to a lull in prices for both renters and buyers alike, so between the seasonal slowdown and decreased competition from the flipping crowd, now may be an ideal time for first-time buyers (or budget-minded renters) to make their move. But perhaps don't wait too long?