Rising Inventory Bad News for Burg

With over 5,000 new apartments (condos and rentals) expected to hit the Williamsburg market this year and next (combined), it doesn’t take an Economics PhD to predict what the impact on pricing is likely to be or what it could mean for the number of foreclosures in the area. There are over 1,800 new condos coming online this year and another 1,200 or so scheduled for 2010, according to The Real Deal. A bigger problem than pricing or over-supply, though, is lack of financing. Very few lenders (if any) are willing to finance condo purchases in buildings that don’t already have the large majority of their units in contract. “The pace of activity [in Williamsburg] is well off from last year,” said Miller Samuels’ Jonathan Miller, “not because of lack of demand, but because buyers are having a very difficult time getting financing for projects that aren’t 70 to 75 percent sold already.” Unless that changes, developers have few options other than to go rental (which their financing partners don’t always want to do) or lose their properties. In fact, banks have already begun foreclosure proceedings at the Factory Lofts at 66 North 1st Street, Warehouse 11 at 214 North 11th Street and the Metropolitan at 349 Metropolitan (above). “It used to be enjoyable, exciting to open a new building,” said David Maundrell, president of Aptsandlofts.com, who provided the inventory predictions aboe. “Now it’s nerve-wracking.” Indeed.
More Foreclosures Likely as W’burg Inventory Grows [TRD]