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Apartment dearth puts squeeze on Brooklyn prices

There are plenty who want to buy but they’re still finding little supply in Brooklyn, according to the recently released Douglas Elliman Q2 reports that showed a continually strengthening market in the borough.

“Inventory is low, the year-over-year increase was a jump,” appraiser Johnathan Miller told Brokers Weekly.  Miller is the president & CEO of Miller Samuel Inc.  who prepares the Elliman reports.

The average sales price in the borough set a new record high for the 12 years that it has been recorded, which obviously points to a strong sellers’ market.  Median sales price rose as well, continuing to beat year-after-year numbers for the eleventh consecutive quarter.

Also, record sales prices were reached on the condo re-sale market, thanks in part to the lack of new inventory which has helped drive prices.

However, new stock volume is “low but rising” according to the report.

That said, Miller doesn’t see an increase in new development being large enough to put any significant den tin the demand for housing in the borough.

“It’s still a low level. It’s sort of like going from 1 to 2,” said Miller.  “I think there would be a lot more sales in Brooklyn if we had more supply,” he continued before labeling the stay of properties on the market as the “fastest marketing time that we’ve ever tracked” since 2007.

“I think the way to think of the Brooklyn housing market is that this is not some sort of price skew being created by sales of high end luxury properties,” Miller added, saying that the sellers at all tiers of the marketplace are seeing favorable sale prices.

“Most of the large part of the new development activity in Brooklyn has been luxury rental,” he said.

“This market set a record based on prices rising across the board, not just at the top of the market. That’s New York City in general, but Brooklyn specifically,” he said.


Buy to rent returns take a dip

Buy-to-Rent potential returns are down in 59 percent of U.S. markets, according to a new report from RealtyTrac, the housing data analysts.

The Buy-to-Rent research found that potential returns from buy-to-rent purchases of three bedroom residential properties in the first five months of 2015 decreased from the same time period a year ago in 169 of the 285 counties analyzed (59 percent).

Across all 285 counties analyzed, the average potential annual gross rental yield was 8.94 percent for three-bedroom residential properties purchased in the first five months of 2015, down from a 9.07 percent potential average potential rental return for 3-bedroom residential properties purchased in the same time period a year ago in those same counties.

“As home price appreciation moderates and aligns more closely with trends in rental rates, the returns in the buy-to-rent market are stabilizing and becoming more predictable — if not as lucrative as they were for investors who purchased a few years ago near the bottom of the market,” said Daren Blomquist, vice president at RealtyTrac.

“Buying rentals continues to be a brilliant strategy that allows investors to hedge their bets in a real estate market shifting away from homeownership and toward a sharing economy.”

Average rental rates on three bedroom properties increased three percent from a year ago across all 285 counties analyzed, while average home prices on 3-bedroom properties increased 4 percent across those same counties.

Potential buy-to-rent returns still increased in 116 of the 285 counties analyzed (41 percent) thanks to rental rate growth outpacing home price growth in those counties.

Major counties where potential buy-to-rent returns increased from a year ago included Orange County, California in the Los Angeles metro area, King County, Washington in the Seattle metro area, Philadelphia County, Pennsylvania, and Suffolk County, New York on Long Island.

Philadelphia was among the counties with the highest potential rental returns for three bedroom properties purchased in the first five months of 2015.

RealtyTrac also analyzed potential buy-to-rent returns in 4,657 zip codes with sufficient fair market rent and home price data in the first five months of 2015.

Zip codes with the highest potential rental returns on 3-bedroom properties purchased in the first five months of 2015 included zip codes in the Detroit, Atlanta, Cleveland, Philadelphia, Jacksonville, Florida, and Memphis metro areas.

The separate Buy-or-Rent analysis found that making monthly house payments on a three-bedroom property is more affordable than paying fair market rent on a three-bedroom property in 188 of the 285 counties analyzed (66 percent).

Major counties where it is still cheaper to buy than to rent include Miami-Dade County, Florida (42 percent of income to buy), San Bernardino County, California in Inland Southern California (36 percent), Clark County, Nevada in the Las Vegas metro area (27 percent), Broward County, Florida in South Florida (35 percent), and Wayne County, Michigan in the Detroit metro area (23 percent).


Pre-sales start at Brooklyn Tower

Adam America and the Naveh Shuster Group announced that they have launched pre-sales at their development 190 South 1st, a 32-unit, 13-story luxury new development tower in South Williamsburg.

MNS brokerage firm will oversee sales and marketing at the building, which is located at 190 South 1st Street at Driggs Avenue.

“Once complete, 190 South 1st Street will satisfy the demand from people who have been in search of luxury residences to purchase in Williamsburg – we are bringing a high-end luxury product to the market and are confident that it will resonate with the Williamsburg buyer,” said Dvir Cohen Hoshen, co-founder of Adam America.

Designed by architecture firm, ODA, 190 South 1st will feature a mix of studio, one- , two- and three-bedroom apartments, as well as a full-floor penthouse with a private rooftop terrace. Prices range from $565,000 to $1,525,000.

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