Whenever we get news about mind boggling Brooklyn real estate deals, which is more or less on a daily basis, the underlying question is always, “But wait, who’s actually buying this stuff?” The wealthy young ghosts imagined by developers? Russian billionaires? Foreign governments, maybe? Well, now we have something of an answer, in the form of a new “Profile of Home Buyers in Brownstone Brooklyn” report from Ideal Properties Group. The answer, of course, is people who are making a lot more money than you.
Per DNAinfo, there are more and more buyers on the Brooklyn market earning $300,000 or more per year, and they now account for 30 percent of the borough’s home buyers, a 316 percent increase in the first quarter of 2014 over the previous year.
And even for these people, the market’s getting more competitive. Ideal Properties managing director Aleksandra Scepanovic told the site, “A lot of our agents are working with buyers who, even if they have $500,000 in savings and $200,000 available to put down, [agents] are shopping them around with hundreds like them or better qualified […] The question is whether you’ll be able to purchase the exact property that you want. Even if you can somewhat afford a specific property, there will probably be someone else with more disposable income or liquid assets [who will] beat you. So, you may have to settle.”
Buyers in the $100,000 to $199,000 annual income range still represent a slight majority (31 percent of buyers), and predictably, data shows that a whole lot of them work in finance, “accounting and sales positions,” law, marketing, and media (!!). In other words, people who sound a whole lot like Donald Trump in-law Jared Kushner, who just yesterday made headlines for snapping up six properties from Brooklyn Law School for $36.5 million, with plans to turn half of them into mansions. Of a home near the Brooklyn Museum that recently saw a bidding war in spite of its nearly $4 million price tag, Scepanovic said, “Can most of us afford that? No. But there are apparently a lot of people who can.”
One optimistic, or at least interesting thing to note? As Brownstoner points out, a surprising 25 percent of said wealthy buyers were self-employed, and 39 percent of buyers already lived in Brooklyn. So, maybe we can loosely interpret this as a sign that the dream of starting your own small business, only to prosper and find a nice fixer-upper brownstone is still alive and well? Yes, that’s definitely what this all means.
Follow Virginia K. Smith on Twitter @vksmith.