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We’ve noticed several signs recently that the quickly rising prices for Brooklyn town houses may begin to slow soon. Nationally, growth of home prices is slowing down, according to the Case Shiller index. Mortgage interest rates have finally begun to rise. And, finally, equity-backed investment firms — which have purchased at least an estimated third of homes across the U.S. and buoyed prices nationally as well as in Brooklyn in recent years — are beginning to falter. Last week, the U.S.’s second biggest owner of single-family rentals, American Homes 4 Rent, laid off employees after going public. Early mover Carrington Holding has stopped buying single-family homes to rent and has started to sell, reported Businessweek.

“We just don’t see the returns there,” said the company’s chief executive officer in the story. “There’s a lot of — bluntly — stupid money that jumped into the trade without any infrastructure, without any real capabilities and a kind of build-it-as-you-go mentality that we think is somewhat irresponsible.” At least three companies have reported losses in their single-family rental investment businesses because they snapped up houses faster than they could fix them up and fill them with tenants. “Colony American Homes, a division of Thomas Barrack Jr.’s Colony Capital, has found tenants for only 51 percent of the 9,931 homes it bought for $1.4 billion, according to a May 28 regulatory filing. American Residential Properties (ARPI) and Silver Bay Realty Trust (SBY) reported losses in the quarter ended March 31,” the story said.

Closer to home, we hear even more inventory is about to come on the market in Bed Stuy — so much inventory that prices are expected to slow or even plateau there. What do you think? Could sale prices for town houses slow across the borough? What about apartments and rentals?


What's Your Take? Leave a Comment

  1. Simple-minded take on the crazed flipping orgy of Brooklyn: all of that plaster is being ripped out and replaced by cheap drywall and exposed brick and those horrible, horrible beige bathrooms. Prices I do think will fall back down, but we’ll all be stuck with horrific drywall, baseboard heating and vessel sinks forever.

  2. BK333 is a real estate agent. I mean, duh.

    Yes, this house COULD be 8 million dollars!! Except it’s not, and frankly, if I had eight million dollars to spend on a house, I’d want peacocks on the lawn, attack dobermans, and a reflecting pool. But perhaps that’s just me, perhaps there are many denizens of Brooklyn with $8 million to spend on a house who want the “simple” life, when they are in Brooklyn and not Gstaad.

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