So, that’s it? This is all turning around, and we’ll all be able to afford homes for our children, be they real or hypothetical? Well, not necessarily, but Brownstoner posits an interesting theory, which is that an excess of blind enthusiasm flooding Brooklyn’s real estate market is actually about to cause prices to plateau, and maybe even drop.
A potential (small) downturn is also part of a nationwide trend: after a post-recession upturn, the rise of home prices is starting to slow down, a few major investment firms have found themselves in trouble, and some are making moves to sell inventory instead of buying up more while others struggle to rent out all the inventory they frantically snapped up while the market seemed endlessly promising.
“We just don’t see the returns there,” Carrington Holding’s CEO said of his company’s decision to start selling. “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.” Further evidence? Sources tell Brownstoner that so much real estate inventory is about to hit the market in Bed-Stuy that its rapidly rising prices are likely to plateau, or at least rise a little less rapidly. So what, no more record-breaking $1 million apartment sales, or apocalyptic stories about Bushwick’s housing prices? No, those’ll probably keep coming for a good long while. But if you were looking for at least some kind of indication that the current market is a crazy bubble and not just the new normal, this seems to be it.
Follow Virginia K. Smith on Twitter @vksmith.