Adam Dahill, producing branch manager at loanDepot, has been in the mortgage lending business in Brooklyn for 16 years — long enough to have outspoken opinions on how the economy will affect Brooklyn real estate. He has been ranked in the top 1 percent of mortgage originators in the U.S. since 2014.
1. Interest rates will go to 5 percent. “In a year or so we’ll see certain, less favorable lending scenarios hit 5 percent or more,” said Dahill. “But the stock market is volatile, and the tax plan is causing inflation fears, and inflation can cause interest rates to go up, which causes more volatility in the market, which can then send rates lower.”
So, in short, Dahill doesn’t see rates staying at 5 percent. “I see them coming back down if and when the stock market has a correction.”
2. Looser lending. “Now that rates are moving higher I think retail banks are going to move towards other parts of the market. As their cost of funds are increasing, they’ll scale back on lending, because it’s very expensive to do mortgages right now — a lot of regulations, a lot of liability.”
As a result, Dahill says we’ll see more non-bank lenders, such as loanDepot, which has a vast array of products for all borrowers. “That’ll make it easier to get loans.”
3. More gentrification: “Garages will continue to go away on Atlantic Avenue, which will make brownstone neighborhoods more coveted — and more expensive,” said Dahill. “Buy smart, because there will be fewer opportunities for cheap townhouses.”
Dahill, who has renovated and sold a number of historic Brooklyn townhouses, says there is an easier point of entry than derelict property. “People will be buying renovated houses and re-renovating them.”
4. More conversions. “We’ll see more brownstones being chopped into condos or going single-family, or a three-family being turned into a two-family, or condo-ing them,” said Dahill. “There will be fewer three- and four-unit rental properties, as you’ll see more individual ownership. Small rental buildings will be converted in one fashion or another.”
Why? Dahill says that people are living in Brooklyn longer. “Brooklyn has always had a strong family backbone, but many young adults would have a child and move to the suburbs. “Now those same families are staying to raise their kids here and they need the space.”
Dahill recently opened a new office at 407 Atlantic Avenue in Boerum Hill. For information on a home or refinance loan, go to his website here.