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April 4, 2008

Foreigners Start to Fancy Brooklyn

As has been well documented in the media for a few years now, the weak dollar has drawn droves of foreigners to Manhattan's residential real estate market. The trend hasn't been as pronounced in Brooklyn, though an article in this month's Real Deal says that's rapidly changing. "The pace of the interest by foreign buyers in the outer boroughs is probably double or more than it was a few years ago," said Jonathan Miller, CEO of real estate appraisal company Miller Samuel. In particular, brokers say many overseas buyers are snapping up Brooklyn brownstones as investment properties and then renting out units or trying to flip them. The one Achilles Heel Brooklyn has in terms of foreign buyer interest is the dearth of new condo development in the borough's toniest neighborhoods, such as Brooklyn Heights. On the other hand, the story also makes mention of a recent article in the U.K.'s Daily Telegraph telling readers that Brooklyn home values are sure to increase, especially as massive waterfront condos are finished. "The scale of these projects is so great that some analysts predict that this region of Brooklyn will become a second Manhattan, giving prices a further boost," said the Telegraph story. First Carrie and her crew, now the foreigners—what's next?
Foreigners Crossing Pond and the River to Brooklyn [TRD]
Photo by Vipal

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I propose a toast!

www.smoinge.com/media/1721/Opening_a_Beer_Bottle_with_a_Chain_Saw/

Posted by: guest at April 4, 2008 9:46 AM

Guess they've heard of sideshows in Coney Island. First they see Red Hook, Bed Stuy, then Juniors. And Crooklyn it is. No wonder double decker buses are beginning to congest this town. Brooklyn is the 'other' they gawk at and the new object of their gaze.

Posted by: guest at April 4, 2008 9:49 AM

1) Encouraging foreign buyers to purchase as investment adds risk to market (look at Florida, etc).
2) I would bet there are far more foreign- born owners in Brooklyn and Queens - but they live here and are here to stay. And most are not from white northern european countries so NYTimes, NY Mag, etc are not really interested in that story.
3) I still hate that term 'outer boroughs'.

Posted by: guest at April 4, 2008 9:55 AM

Ugh. Let's hope what happened to Manhattan doesn't happen to Brooklyn. It's expensive enough already.

Posted by: guest at April 4, 2008 9:57 AM

Thanks to the Fed's weak dollar policy, Americans are being priced out of their homes. How long before we are officially a Third World Country?

Posted by: guest at April 4, 2008 10:01 AM

Anyone who thinks someone from Britain would think of Brooklyn as Crooklyn really has no idea of the crime rate over there.

Posted by: mshook at April 4, 2008 10:05 AM

9:46...I agree....IF YOU DON"T WANT FOREIGNERS TO BUY YOUR PROPERTY THEN DON"T SELL IT TO THEM!!!! Otherwise we should toast the outside money pouring into the neighborhoods.

Only an American though, can open a beer bottle with a chain saw!!!!

Posted by: daveinbedstuy at April 4, 2008 10:05 AM

This is really wishful thinking. There will always be europeans who move to Brooklyn to live, but the jet set who buys million dollar properties as pure investments/second homes are NOT interested in buying outside of Manhattan.

I work for a European bank. My colleagues who have substantial Euro assets read the papers. They know we are in a recession. They also know that they can't buy co-ops as investment properties, which basically confines them to townhouses and condos in fringe neighborhoods. None of them are interested in making a $3 to 4 million dollar play on the Park Slope/Brooklyn Heights townhouse market. And they certainly aren't buying for investment in the "newer" neighborhoods that are almost certainly going to be hit hard by this.

Posted by: guest at April 4, 2008 10:07 AM

It ain't called the Empire State for nothing. Someday NY will be someone's empire.

Posted by: guest at April 4, 2008 10:07 AM

10:07 is correct as well. I've got a lot of European colleagues as well who buy property elsewhere in the world. They may be interested in Manhattan condos but beyond that all you'll hear about are the trophy upper east side townhouses and floor in The Plaza.

Don't worry all you xenophobes, they are not coming to a neighborhood near you. If they did, it would be an upgrade and they are not interested in being gentrification leaders.

Posted by: daveinbedstuy at April 4, 2008 10:15 AM

"Brooklyn home values are sure to increase, especially as massive waterfront condos are finished."

I'm still fascinated by this economic theory that increasing the supply of a commodity causes its price to rise.

Posted by: Flatbushwhacker at April 4, 2008 10:24 AM

Why is being concerned about the relative economic decline of your country xenophobic? Give me a break.

Posted by: guest at April 4, 2008 10:25 AM

MsShook- you are insane. Compare the murder rate of Brooklyn and London, and get back to me on which one has a higher crime rate.

Posted by: guest at April 4, 2008 10:25 AM

There are a lot of Londoners who work on wall st, paid in euros or pounds and live here. The two most recent sales in our brooklyn heights co-op bldg were to Londoners. And there are 5 London-born kids in my nephew;s kindergarten class in PS29 (5 out of 25).

Posted by: guest at April 4, 2008 10:28 AM

10.25, have you lived in England? I spent over 15 years in Manchester, and living in Red Hook is like a frolic in the park in comparison. Maybe Notting Hill is a different story, but I'm talking about the level of daily crime normal people in Britain have to deal with (violent crime included... ever walked around a city when the pubs let out?) and it is WORSE over there. I had a detective from the 13th precinct in Manhattan complain to me about rising car crime... and when he mentioned 2 incidents a month I nearly laugh out loud: every 10 minutes when I was living in the UK.

Posted by: mshook at April 4, 2008 10:31 AM

"None of them are interested in making a $3 to 4 million dollar play on the Park Slope/Brooklyn Heights townhouse market."

Really?

Three of my neighbors are foreigners who bought their brownstones in the last 2 years.

Posted by: jerri blank at April 4, 2008 10:35 AM

Brooklyn is nu doubt great investment regardless of the current financial trends. My neighbors are all foreigners and decided on Brooklyn because it's a much better deal than Manhattan.

Posted by: guest at April 4, 2008 10:41 AM

One Brooklyn Bridge Park marketed for one yr and 33% sold. 'Nuff said: pipedream

Posted by: guest at April 4, 2008 10:45 AM

10:01: According to Pete Peterson (Blackstone Group & former government official), we are well on our way to becoming a third world nation, and we'd better wake up and change before it's too late.

Posted by: guest at April 4, 2008 10:53 AM

Wishful thinking. Most Europeans with the means (myself included) don't have a speculative investment in US real estate at the top of our global investment opportunity list.

Posted by: guest at April 4, 2008 10:54 AM

10:41 Huh? So Mnahattan values are legitimate and as a result Brooklyn values have massive upside? Seems that both values are relatively inflated. Tripling over 5-6 years is not normal, and these things always return to the long-term trend line. By your logic, I should buy a Honda because it is a much better value than a Porsche...and hopefully someday will be worth as much

Posted by: guest at April 4, 2008 10:58 AM

The kind of sentiment expressed (and disavowed) by daveinbedstuy is troubling. Don't sell to foreigners? And don't sell to jews, or blacks, or hispanics because property values could be affected?

Posted by: PPSer at April 4, 2008 11:01 AM

ms hook, you must have lived in one crappy area in Manchester!! Manchester has always had problems with high crime however I never had any of the problems you talk about when I lived there. As for the rest of the uk, it is pretty damn safe in comparrison.

Posted by: guest at April 4, 2008 11:06 AM

PPSer...thanks for acrtually understanding what I was trying to say.

That phrase I used in my 10:05 post about not selling if you don't want them to buy was actually used when the Japanese came over to buy Rockefeller and Pebble Beach in 1989

Posted by: daveinbedstuy at April 4, 2008 11:07 AM

Mshook, compare gun death rates over there to here. Yes, there might be more fights/muggings/etc, but I think Brooklyn itself probably has more gun deaths in a year than England does in one year...

Posted by: guest at April 4, 2008 11:13 AM

Everyone is saying that Europeans have moved next to them which I have no doubt is true, but that's not what the article seems to be saying. It's saying that there are Europeans living over there and buying a Brooklyn Townhouses as investments. Sounds crazy to me, these townhouses require a lot of maintenance and you can pay someone to do it but it will cost you an arm and a leg if you are not here personally managing your property. I doubt this is happening.

Posted by: Brooklynnative at April 4, 2008 11:16 AM

I have another home in Philadelphia as well, the 5th Borough. I've been there since 1998, well ahead of the recent migration wave of Manhattanites.

The crime rate there is higher than any major city in the country yet New Yorkers continue to move there and drive up the prices. You'd be amazed how prices moved from 1998 to now.

And by and large, the New Yorkers are looked upon as foreigners. The locals don't like many of them with their pushy, obnoxious, complaining behavior and I, not a native New Yorker, can't diagree at all.

Posted by: daveinbedstuy at April 4, 2008 11:17 AM

MsShook- Compare the murder rate of Brooklyn and London, and get back to me on which one has a higher crime rate.

Posted by: guest at April 4, 2008 11:18 AM

With the European housing markets about to fall off a cliff (and the rest of the Euro Zone with it) I can't imgaine there will be many looking to invest here. If anything, as the exchange rate starts to improve (for us) there will be profit taking by some European investors, not investing.

Posted by: guest at April 4, 2008 11:18 AM

Brooklynnative...I agree with you...owner occupied will continue but the investment properties require a lot of work and are best suited to condos which I am learning are far fewer in Brooklyn than the coops.

i think you are correct about the jist of the article.

DKDC, I'm only interested in brownstones (and brick and limestones, too)

Posted by: daveinbedstuy at April 4, 2008 11:22 AM

speaking for a group here is silly. minor anecdotal evidence means zip.

do predict that the williamsburg waterfront condos will be gobbled up and very valuable within a 5-10 year range. my anecdotal evidence is that i do know many people buying investment properties in williamsburg now.

the williamsburg waterfront views and that entire area will not be duplicated anywhere. unlike dumbo, it will be completely isolated from projects, loud bridges and smelly traffic.

we will see true lovely "beach" front and public park area. if you want to fret about the next 2 years, go ahead, but within 5, huge uptick in value there.

if there are brownstoners committed to brooklyn here, buy now in williamsburg pre-construction prices and rent out. you could make a lot of money for your retirement.

Posted by: guest at April 4, 2008 11:34 AM

Aren't those Williamsburg waterfront condos quite a hike to the L train? I guess there are/will be ferries but that's not always so convenient once you get into Manhattan. Also, I hear the L train is already so packed people cannot get on in the morning at the Bedford stop. Views are killer, but not sure the location is so hot.

Posted by: Brooklynnative at April 4, 2008 11:44 AM

Jerri - you are an idiot. Read my first sentence. I do not deny that Eurpoeans buy in Brooklyn to LIVE HERE. But that alone won't prop up prices. I simply stated that the Europeans I know (and there are quite a few) do not buy property in Brooklyn to INVEST, partially because there are so few condos in good neighborhoods, partially because a prime Brooklyn townhouse is a huge investment with large carrying costs, even if you are paying in Euros or Pounds.

Posted by: guest at April 4, 2008 11:51 AM

I have noticed that European and Asian investors are extremely racist. On the outside they are all progressive holier-than-thou types, but inside they are in the 1950's when it comes to race. They view Brooklyn as being predominantly Black and so they will not set foot here after dark much less buy here.

Posted by: guest at April 4, 2008 12:02 PM

Ok, clearly the gun crime rate will be higher, because guns are easier to buy here. The only online comparison I could find (googled NYC versus London crime rate) said London's crime rate is 40% higher than NYC's. Of course if you live in certain NYC neighborhoods and are perhaps involved in a gang or some drug trade, or unluckily walking by some, you are at a higher risk of getting shot. This does not negate my point that average people are more impacted by crime, more afraid of crime, and more likely to be assaulted or robbed in the UK than they are here. Again, I ask you if you have lived there.

Posted by: mshook at April 4, 2008 12:03 PM

11.06, don't get me wrong, I love Manchester, and loved it while I lived there. I actually lived in Chorlton, which I'm sure you'll agree is not a bad area, perhaps the most desirable central neighborhood of them all. My home, and those of most of my friends, was burglarized at least once; mugged or attacked on the street more than once; vehicle stolen (and my friend's husband's van was just stolen in Chorlton last week), etc. There is just no comparison.

Posted by: mshook at April 4, 2008 12:09 PM

Europeans and Asian investors are not racist.

United States provides good value for their various currencies.

US politically has always been stable not like dictatorships, coups, etc worldwide.

On the inside foreigners are not racist either nor are they hypocrites. .

.The world is a large place and brooklyn is only a small part of it.

Posted by: Ysabelle at April 4, 2008 12:16 PM

11:34 - developer's group or corcoran? for my retirement. rrriiighhtt...

Posted by: guest at April 4, 2008 12:22 PM

Americans have been buying real estate in foreign countries for ever until the dollar value decreased, look at Tuscany half of the best properties are owned by americans , so what is the big deal if europeans are buying here, we started the trend, what goes around comes around!

Posted by: guest at April 4, 2008 12:22 PM

the williamsburg waterfront is a great location. it's a short walk to the L unless far south in which case take the JMZ. anyway, irrelevant to you if you are an investor.

Posted by: guest at April 4, 2008 12:27 PM

"...there will be profit taking by some European investors, not investing."

Couldn't agree more, 11:18.

Posted by: guest at April 4, 2008 12:32 PM

"The pace of the interest by foreign buyers in the outer boroughs is probably double..."

0 x 2 = 0.

Posted by: guest at April 4, 2008 12:46 PM

Its a big deal if the buying by foreigners is due to the relative decline of the wealth of Americans. I am sure most brokers could care less, but from a macro perspective, Foreigners buying out locals is a sign of economic decline. Not something to celebrate.

Posted by: guest at April 4, 2008 1:02 PM

HEY, YOU SCRATCHED MY ANCHOR!

Posted by: guest at April 4, 2008 1:19 PM

First of all One Brooklyn Bridge Park condos have a great view if you are on the water other than that there is nothing near by and you need to cross a main street to go somewhere and about 4 feet from the BQE...

For that price and be overlooking the BQE is crazy I dont get it...

Paying that money I would want to be in the heart of B-Heights or near Smith and Court Streets...

Posted by: guest at April 4, 2008 1:57 PM

"Foreigners buying out locals is a sign of economic decline. Not something to celebrate."

I don't agree. I'm on the verge of perhaps buying a property in Buenos Aires, Argentina. That city is making a HUGE comeback from financial ruin. It has the potential for investors. A 1 bedroom in the most beautiful part if the city can be had for 75K.

Their economy is not at all declining. It doesn't really have anywhere to go but up after 2001 when things went to shit there.

I think foreigners buy properties because they see potential for growth. And because they enjoy where they are buying.

Isn't that partially true?

Posted by: jerri blank at April 4, 2008 2:10 PM

Careful Jerri. Argentina is doing well only because of rising commodity prices. Check out this article

http://www.economist.com/world/la/displaystory.cfm?story_id=10880587

Posted by: Polemicist at April 4, 2008 2:22 PM

Jerri

You have made my point. Argentinians are poorer than Americans and thus their city is "cheap" to Americans, in the same way our economic decline is making America "cheap" to Europeans. 90 years ago Argentina was richer than much of Europe, but is now relatively poorer. Buenos Aires may very well be on an upswing. New York is becoming cheaper to Euros, and thus on a downswing in terms of relative wealth.

Posted by: guest at April 4, 2008 2:41 PM

so even those rich europeans are getting priced out of manhattan? yikes.

Posted by: guest at April 4, 2008 2:49 PM

It ain't called the Empire State for nothing. Someday NY will be someone's empire.

Posted by: guest at April 4, 2008 3:21 PM

2:41 you're oversimplifying a tad...Russians are poorer than Americans but Moscow is not "cheap" to us. Even Argentina was poorer than us even 10 years ago but real estate was a good bit more expensive due to the currency peg with the dollar. US real estate is cheaper, with the emphasis on "-er" because of the dollar's decline but Brooklyn prices are still higher than, say, Berlin.

Posted by: guest at April 4, 2008 3:38 PM

Guys, don't get so worked up over some real estate shills in UK. Those articles are bought by sales agents and mean very little.

Posted by: guest at April 4, 2008 3:46 PM

The day that Limeys or Frogs start buying houses in Clinton Hill or Bed Stuy as investments will be the day pigs fly.

Posted by: guest at April 4, 2008 4:01 PM

europeans are still coming over to the new world for more space. there's nothing new under the BK sun.

Posted by: guest at April 4, 2008 4:18 PM

People, Europe's about to crash, Britain esp. The UK is way over-leveraged, just like Americans. Germany and France less so, but Britain's about to go *pop*.

Everyone's tied into everyone else. Matter of time before the global slide happens.

Posted by: guest at April 4, 2008 5:49 PM

Europe is about to have the same kind-of credit crisis and housing meltdown experienced here; once again, NYTimes is about 2 years behind the trends.

Posted by: guest at April 5, 2008 10:37 AM

CONGRATS!!! Ysabelle finally got laid!

Posted by: guest at April 5, 2008 8:54 PM

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April 4, 2008

Foreigners Start to Fancy Brooklyn

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