Williamsburg: The New Epicenter of the Housing Crisis
Oh pity the poor denizens of Williamsburg. The erosion of hipster trust funds is leading their greasy little utopia to slowly devolve into some sort of Mad Max-esque, post-apocalyptic real estate wasteland, just like Miami! So says New York Magazine.
Anyone who's walked around Williamsburg lately can see the painful signs of a busted bubble. New developments sit virtually vacant. New building constructions have stopped cold with the landscape of the area littered with semi-constructed buildings. We already knew things were bad, but we had no idea that things were this bad.
With sales across Brooklyn down a staggering 57 percent from a year ago, Williamsburg, with its high density of new construction, has taken on an ominous disposition. Walk down virtually any block and you'll come across an amenity-laden building that sits nearly empty: relics of a moment in history that seems, increasingly, like a fever dream.
Most unsettling are the cases of the developers who seem to have vanished, leaving behind so many vacant lots and half-completed buildings-eighteen, to be precise, more than can be found in all of the Bronx-that large swaths of the neighborhood have come to resemble a city after an air raid.
All over the city, overleveraged developers have seen their projects stymied by the recession, but the highly speculative nature of what's happened in Williamsburg stands out as exceptionally dramatic and misguided-New York's version of the collapsing exurban "boomburgs" in Florida and Arizona.
Oh but wait—This is only the beginning!
Part of what makes the present situation so dire is that it is still in the early stages of unfolding. There are already about 400 new apartments on the market in Williamsburg, and additional condos are completing construction every month. According to a study (Real estate broker David) Maundrell released last month, 2,818 new apartments will have hit the market by the end of this year, with another 2,766 projected by the end of 2010. On top of this, Fannie Mae, the country's most dominant home-mortgage lender, recently implemented a policy requiring that buildings be 70 percent in contract before guaranteeing mortgages, thus delaying the moment when a developer can stop covering the taxes and common charges on a finished project.
The writer of New York's massive piece, David Amsden, took some time to visit a few of the new developments in the neighborhood.
I made my way to a building called Warehouse 11, on the corner of Roebling and North 11th Streets. Marketed by David Maundrell, the building has 120 total units (plus the requisite yoga center, playroom, parking garage, 24-hour concierge, gym, and communal sundeck). While the model apartment seemed an appealing enough place to live, there was something generally off about the building as a whole: Despite having been on the market since early 2008, only 30 percent of the units were in contract, and it was clear that construction wasn't complete. The list prices, too, were significantly higher than comparable products, as if the developer had not been informed about the current state of the economy. A few weeks later, I noticed the front doors of the lobby had been padlocked shut. The process of foreclosure had begun.
Looking at the bright side, we suppose all of these vacant new developments will lead to some awesome squatting opportunities for the hipster looking to enhance his or her hardcore street cred. We look forward to having our tips line flooded with ridiculous Williamsburg hipster squatting stories for years to come!
The Billyburg Bust [New York]
Pic via Look At This Fucking Hipster