"Last February, Sarah Silva, a real-estate agent at Brown Harris Stevens, started working with a Manhattan couple who'd recently had a baby and were looking to buy a two-bedroom for under $2 million in Park Slope, Cobble Hill, or Brooklyn Heights, preferably one with a little outdoor space. They made a combined income of a quarter-million dollars a year and had a few hundred thousand dollars saved for a down payment."
"In any other time or place, this would have been sufficient, ample even. But after making several offers and losing out to other, higher bids, they decided to take a break this November. "They felt they were priced out. All the homes left that they could afford required a significant amount of work," says Silva. "They're hoping that maybe a bigger bonus will allow them to compete next year.""
"Not everyone struggled, though. One of Silva's other buyers was a man with a net worth of more than $100 million who purchased a $4 million downtown penthouse for his son graduating from college. He paid over ask, in cash. Then the family decided to sink another half a million into a full renovation, even though the apartment was already in excellent condition. "My business shifted almost exclusively to all-cash buyers last year," says Silva. "The buyers who needed a mortgage just got beat out.""
A Manhattan couple earning about $250,000 and with several hundred thousand saved repeatedly lost bidding wars for two-bedrooms under $2 million and paused their search after finding only fixer properties in their price range. Wealthier buyers with large liquid net worths purchased prime properties in cash, sometimes paying over ask and investing in renovations. The market split widened between salaried, mortgage-dependent buyers and the superrich who could bypass financing. Several years of high interest rates and rising rents amplified the advantage of cash buyers and left many otherwise qualified buyers effectively priced out.
Read at Curbed
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