Williamsburg inventory predicted to double
June 25, 2009 06:30PM By Sarah Ryley
Factory Lofts (left) and the Metropolitan in Williamsburg
The inventory of new apartments in Williamsburg could double next year, which industry experts say puts more building foreclosures on the horizon.
An estimated 2,818 new apartments will have entered the Williamsburg market by the end of this year, according to data compiled by residential brokerage firm Aptsandlofts.com. Next year, 2,766 apartments are expected to come to market, the company data says.
Prior to the economy tanking last September, such figures would have been viewed as evidence of a healthy North Brooklyn real estate market. Now, they are met with trepidation.
"It used to be enjoyable, exciting to open a new building. Now it's nerve wracking," said David Maundrell, president of Aptsandlofts.com.
He said the biggest hurdle to selling a new project is obtaining mortgages, particularly since Fannie Mae started requiring in March that a building be 70 percent sold before it will guarantee mortgages in a building. Next month Freddie Mac is expected to implement the policy, which is intended to reduce the amount of risk the government-controlled finance companies take on.
"The pace of activity [in Williamsburg] is well off from last year," said Jonathan Miller, president of appraisal firm Miller Samuel. "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."
Miller and Maundrell concurred that some projects will not make it before being foreclosed on.
Already this year, banks have moved to foreclose on several buildings in Williamsburg.
Factory Lofts at 66 North 1st Street had at least five units in contract, and the Metropolitan at 349 Metropolitan had at least one closed sale, when their lender Chinatrust Bank filed for foreclosure in January.
In February, Capital One began foreclosure proceedings against the condominium Warehouse 11 at 214 North 11th Street. Maundrell said deposits were returned to more than 30 buyers.
In March, Wachovia Bank began foreclosure proceedings on 53 Hope Street, a six-story factory that Massachusetts-based developer Boulder Capital had planned to convert into 92 loft condominiums. Boulder, which did not return requests for comment, had only commenced interior demolition on the building.
Rising inventory coupled with the slow pace of sales has dragged down absorption rates, the rate at which a building is expected to sell or rent, Miller said.
"If a project is selling much slower than what was budgeted, it just all depends on the staying power of the developer and the bank behind them," he said. "It's project by project, but it's not good."
According to Aptsandlofts.com's data, there are also 782 apartments on hold in Williamsburg, most marked by the now ubiquitous empty lot.
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Comments
Anonymous
No more borrowing crazy amounts and over leveraging properties. Developers need to be serious and do a lot more with their own money...
Comment #1 Posted By: Anonymous 06/25/09
Anonymous
Williamsburg needs a 50% off haircut, end of story!
Comment #2 Posted By: Anonymous 06/25/09
Anonymous
Maundrell = broker who does not believe in his area of service.
Comment #3 Posted By: Anonymous 06/26/09
Anonymous
Williamsburg is a dump and rats are running everywhere there...and it is near the power plants....enjoy your radiation..
Comment #4 Posted By: Anonymous 06/26/09
jay
I wonder if financing would be easier to secure if these units were priced more appropriately. $750/square foot is a far cry from where units should be set. Those are Park Slope prices. I would imagine that if the units were closer to $500/square foot, then consumers would have a larger percentage of down payment available, making them friendlier to lenders, and subsequently move more units. It seems that Williamsburg (like much of the country) got ahead of themselves.
Comment #5 Posted By: jay 06/26/09
Anonymous
I'm curious #4. What power plants are in Williamsburg?
Comment #6 Posted By: Anonymous 06/26/09
Anonymous
There is one at the end of Grand Street on the waterfront, for one.
Comment #7 Posted By: Anonymous 06/26/09
Anonymous
#7 - No there isn't. Where? The domino sugar factory? Or the waterfront park there?
Comment #8 Posted By: Anonymous 06/26/09
Anonymous
Power plants don't give off radiation, at least not the ones in NY. Smog yes, radiation no.
Comment #9 Posted By: Anonymous 06/26/09
Will
There is a very small power plant at the end of Grand St. near the park - one of a number of small plants that were built a few years back to deal with high summer use. They don't emit radiation. Of course, DUMBO actually has power plants ... so does Astoria. Doesn't really have anything to do with anything ...
Comment #10 Posted By: Will 06/26/09
Anonymous
the hipsters and trustafarians will have to go back to wearing their trucker hats and drinking pabst blue ribbon
Comment #11 Posted By: Anonymous 06/26/09
Billyburger
New condos are trying to sell at $600 a square foot-- and THEY WON'T. $500 a share foot and people will buy. You have two choices with all this inventory coming online-- sell closer to $500 and move some units, or stick to your guns at $600+ and go into foreclosure.
Comment #12 Posted By: Billyburger 06/26/09
Anonymous
Fools, buy & rent Williamburg will be ok lots of baby carriages take a look
Comment #13 Posted By: Anonymous 06/26/09
Anonymous
if you think that living near the power plant doesnt affect your health then think again. Yes it does affect your health. You could it is possible you could get heart disease or lung cancer if the power plant has anything to do with radiation or smoke coming out from a tower.
Comment #14 Posted By: Anonymous 06/29/09
Anonymous
Its crazy the truth that real estate brokers dont want you to know..
Comment #15 Posted By: Anonymous 06/29/09
Anonymous
Prices have to come down big time. Even $500 per sqft is too much for most properties in Williamsburg. So many empty lots that will never be built. So many new 'luxury' buildings that will be converted to rentals at best and homeless shelters at worse. Waterfront 'Park' is nothing more than a dump - I think it actually used to be a garbage dump. Just saw a few open houses this weekend - some want $800 and properties are sitting there since Aug. 2007. Does $1000 a month maintenance on a condo sound enticing? Good luck boys
Comment #16 Posted By: Anonymous 06/29/09
Bunny Hop
I don't get it, Aptsandlofts.com is closing their sales office and loosing marketshare all over williamsburg yet the real deal looks to him as the man on the pulse of the burg?
Comment #17 Posted By: Bunny Hop 06/29/09
Anonymous
The facility at the end of Grand Street is not a power plant, but rather a storage facility for toxic waste from other power plants held there until it can be disposed of properly. So, in a way, worse than a power plant. Most definitley toxic in the event of any leakage. and yes, the waterfront park on the northside used to be a garbage dump. the ENTIRE waterfront area where Northside Piers, The Edge, 111 Kent, and the park are/face... used to be a dump. I've met a landowner who sold his formerly dump-facing property to a developer whose unsold condo building now sits there. That guy was happy as a clam. Bet the developer isn't.
Comment #18 Posted By: Anonymous 06/29/09
Anonymous
Look for buildings with just under 70% in contract (ex. an 8 unit building with 6 signed contacts), and leverage the conversion process with a low offer. That 7th signed contract becomes the needed number to convert. They need your deal to convert and will most likley you can even get a nice unit for under 500sf. My friend bought a place for just over $300K, in an 8 unit bldg, which is 620sqft, with a view and balcony. Do some homework on these smaller buildings. These are usually 1st time developers with need to convert their projects to move on!
Comment #19 Posted By: Anonymous 06/29/09
Anonymous
To #19: It seems to me that if the 8-unit building you used as an example had six signed contracts, Fannie Mae WOULD lend, because they were 75% sold. Hopefully the buyer of that 6th unit made a deal...
Comment #20 Posted By: Anonymous 06/29/09
Anonymous
"The facility at the end of Grand Street is not a power plant, but rather a storage facility for toxic waste from other power plants held there until it can be disposed of properly." thanks for the laugh. fortunately most people don't get their (mis)information from an anonymous blog post, but keep trying. the ones you fool shouldn't be purchasing property anyway.
Comment #21 Posted By: Anonymous 06/29/09
Anonymous
To 20, rushed that, but u get the idea.
Comment #22 Posted By: Anonymous 06/29/09
Anonymous
"You could it is possible you could get heart disease or lung cancer if the power plant has anything to do with radiation" Jeeze, what a tard. You know your computer screen emits radiation don't you? Better watch out.
Comment #23 Posted By: Anonymous 07/01/09
Anonymous
Developers won't sell at some price below the loan amount... the banks will foreclose and just turn the building into rental. Tenants will get a good deal for a few years, then the rent will go up, or you'll be enticed to buy once the lease is up. Some of you don't seem to know anything about real estate. Everyone keeps predicting the death of Williamsburg, but everytime I go there, all I see are huge crowds of people spending money, hangin out at one new restaurant after another.
Comment #24 Posted By: Anonymous 07/06/09
Anonymous
land purchase 150 per buildable ft. construction 200 per ft don't spend more than 400.
Comment #25 Posted By: Anonymous 07/13/09
BuyToSell
Response to Comment #24: Your message "the banks will foreclose and just turn the building into rental.." is MIS-INFORMATION my friend!! ...Banks calling the foreclosure dont turn into renters; they're not in the rental business - they only liquidate and move on. Only Greek landlords who already own the land/buildings (as in Astoria) turn into renters - a very patient crowd they are! Best to All !!
Comment #26 Posted By: BuyToSell 07/14/09
Anonymous
Williamsburg will be just fine. Consider this: the slight decline in housing prices and the number of foreclosures are barely a fraction of what's happening on a national average. Yes, true, a speculative bubble has burst. Certain developers got on board a little too late for that wave. That bubble before it burst, lead to the conversion and/or construction of quite a few very desirable apartments. Whether they sell at lower prices or get rented is only a matter or time. I'm NOT a broker, I promise. Just seems like now's the time to bargain hunt. Take advantage of the lower prices and better negotiating position. In 5 years, when the economy has recovered (albeit on the heels of some other bubble), all the apartments will be full, there will be no more room to make more and your investment will be of significantly greater value. You'll also be in a great neighborhood, 5 minutes from the city, with restaurants, shops, cafes and other great amenities.
Comment #27 Posted By: Anonymous 07/16/09
KOBY
Do you think I can sell my 1200sqft 2BR/2BA Mint condo in a townhouse for 650K?
Comment #28 Posted By: KOBY 07/21/09
Anonymous
The fact that the inventory of available residential units will double by next year shouldn't be a surprise. This was anticipated. Since 2006 there have been 130 new residential developments in Community District 1 (Williamsburg, Greenpoint and East Williamsburg). This is an enormous number of new buildings, and they had to come on line sometime. Of the 130 new developments, 105 of them are condominiums. Some will undoubtedly fail because they can't compete. Everyone was developing property in 2006-2007... including inexperienced developers. The issues are (1) experience, (2) financial staying power, (3) location, (4) building a better product, and (5) timing. Williamsburg continues to get better and better every day in the sense that it is accessible, livable, fun and affordable. There are nearly 200,000 residents in CD1. That number will grow as the market stabilizes.
Comment #29 Posted By: Anonymous 07/24/09
Anonymous
Brokers who don't know how to cross the East River are wimps. If you suggested Williamsburg to your customers who are looking for a great value, you'd take the L-train from Union Square in 8 minutes and see what everyone else has seen.
Comment #30 Posted By: Anonymous 07/24/09
Emit Flesti
The simple fact of all of this is that whomever has bought anything in Williamsburg, is now likely underwater. Prices are falling fast, and NY is always ALWAYS behind the curve of the nation. What they saw last year we will see late this year and 2010. And larger buildings without very many tenants, like those overlooking McCarren, the tenants that do move in will be paying much much more in maintenance until they fill up (if they fill up) the building. On top of that many businesses are closing or will be shortly due to slow business, less foot traffic and higher rents (many 10 years leases are up soon if they came in 99-01). The mall is half empty again even. Yes several shops/restaurants are opening every few months, but they usually close before the year is up.
Comment #31 Posted By: Emit Flesti 08/04/09
Anonymous
Be careful about buying reufrb'ed buildings i Williamsburg and anywhere really. I lived near the 50 Bayard / Ikon (50bayard.com) while they were building, and that building was covered floor to ceiling with black mold. They just painted / drywalled over it. Very very sad and dangerous if someone moves in their with kids, but also that it has come to people doing this to other people.
Comment #32 Posted By: Anonymous 08/04/09