Brooklyn was among 20 U.S. cities in 2014, where home prices climbed nearly 5 percent, reported Bloomberg News.
But, according to RealtyTrac, a California-based data company, Brooklyn takes home the blue ribbon for the city with the highest spike in home prices, even beating out its big brother and neighbor to the west, Manhattan.
In a report released on Friday, RealtyTrac found that in Brooklyn, a resident would need to devote 98 percent of his or her median income to afford the payment on a median-priced home of $615,000. In fact, Brooklyn now ranks as the least-affordable market in the country, followed by San Francisco and Manhattan.
The reason(s)? Well, there are several, beginning with America’s own historic policy of housing discrimination, accelerated more recently during the years of former NYC Mayor Michael Bloomberg. But the reasons offered by RealtyTrac include outside developers and international investors who are inflating prices in a market where home buyers’ incomes have remained flat.
“Incomes have not grown nearly as fast as home prices” in the regions where affordability declined, said Daren Blomquist, vice president at RealtyTrac. “That disconnected home-price growth has been driven by investors and other cash buyers who aren’t as constrained by income.”
As a result, many markets are out of reach for traditional buyers, he said.
It’s a cleaned-up way of saying that city has created a virtual free-for-all development policy that has allowed foreign money to have its way in Brooklyn, at the expense of its middle- and low-income residents.
Brooklyn may be the “hottest brand” in America right now. But it’s on its way to becoming too “hot” for even Americans to afford.